Category: Bookkeeping

A future value factor of 1.0 means the value of the series will be equal to the value today. Since this calculator prompts the user for the present value date (today’s date) and the first cash flow date, it will work equally as well for either annuity type. If you set the dates to the… Continue reading Estimate the Current Value of Fixed & Variable Annuities

Most of these payments will be recorded as assets until the appropriate future period or periods. Accrual accounting records revenues and expenses as they are incurred regardless of when cash is exchanged. If the revenue or expense is not incurred in the period when cash/payment is exchanged, it is booked as deferred revenue or deferred… Continue reading What is the difference between a deferred expense and a prepaid expense?

The product’s Warranty is a promise given to the customer that there will be no problems with it, and those that are damaged will be repaired or replaced at no charge. As you may know, such promises usually last for a specific period, such as a year, three years, or five years. For example, companies… Continue reading How to book liability or expense using a journal entry

Notice that this bond makes interest payments six months apart, on March 1 and September 1 of each year. Since the bond is being bought on July 17 and sold on December 12, neither date represents an interest payment date. Calculate the market price (PRI) for both dates and then determine the difference. On an… Continue reading How to Price a Bond: An Introduction to Bond Valuation

These strategies will help ensure that your payroll records are accurate and compliant. For those of us who are not accountants, not part of the finance team, and don’t create journal entries on https://rikkirivera.com/blog/page/49/ a regular basis, accruals can be a difficult concept. We’ll use the previous example of $818.28 in payroll payable to see… Continue reading What Is Accrued Payroll? Definition + Calculation