What Deferred Revenue Is in Accounting, and Why It’s a Liability

Accounts receivable and accrual are the two distinct parts of an advance bill invoice. The AR part of the invoice behaves similarly to a standard invoice and is displayed in your AR aging report. But it will be posted to your specified deferred income accrual account instead of crediting a revenue account. The company foresees […]

Retained Earnings: Calculation, Formula & Examples

This financial metric is just as important as net income, and it’s essential to understand what it is and how to calculate it. This article breaks down everything you need to know about retained earnings, including its formula and examples. Yes, retained earnings carry over to the next year if they have not been used […]

NPV Formula Learn How Net Present Value Really Works, Examples

Therefore, when evaluating investment opportunities, a higher NPV is a favorable indicator, aligning with the goal of maximizing profitability and creating long-term value. The internal rate of return (IRR) is calculated by solving the NPV formula for the discount rate required to make NPV equal zero. This method can be used to compare projects of […]

How To Fill Out A Receipt Book: Step-by-step Guide

For the landlord, it is a record of the payments made by the tenant and helps to ensure that all rent is paid on time. For the tenant, it is proof of payment and can be used as evidence in case of any disputes. The receipt book needs to create at least two https://www.bookstime.com/ copies—one […]

Double Entry Bookkeeping Debit vs Credit System

Irrespective of the approach used, the effect on the books of accounts remains the same, with two aspects (debit and credit) in each of the transactions. An example of double-entry accounting would be if a business took out a $10,000 loan and the loan was recorded in both the debit account and the credit account. […]