This lesson explains when prepaid expenses are incurred and offers examples of common prepaid expenses. Accrued rent is the amount of unpaid rent owed by a renter or not yet collected by the landlord. The accounting for accrued rent from the perspect... Read more
Free AccessFinancial Modeling ProUse the financial model to help everyone understand exactly where your cost and benefit figures come from. The model lets you answer "What If?" questions, easily and it is indispensable for professional risk analysis.... Read more
One of the most important lines in your financial statements is owner’s equity. A corporation is a legal entity created by individuals, stockholders, or shareholders, with the purpose of operating for profit. Corporations are allowed to enter i... Read more
Gains on these investments inflate assets and also lead to higher net income which carries over to the retained earnings portion of shareholders’ equity. While these investments are reported on the balance sheet and income statement, the method... Read more
This means the balance remains in the payor's account. If the payor doesn't keep track of his account, he may not realize the check hasn't been cashed. This may present the false notion that there is more money in the account available to be spent th... Read more
We’ve seen it work for a national insurance company, which got immediate results by resisting the urge to cut costs and instead adding sellers to its highest-growth market. And we have also found a consistent pattern of profitable revenue gains... Read more
Where, again, text[/latex], text[/latex], and text[/latex] are the size of the payment, the interest rate, and the number of periods, respectively. Where m is the payment amount, r is the interest rate, n is the number of periods per year, and t is t... Read more
The sunk cost can't be recovered, while the opportunity cost can play a critical role in helping to decide the company's financial future. While the company may bring in an additional $1,000 a month by leasing its building, the company may miss out o... Read more
If this occurs at month-end, the deposit will not appear in the bank statement, and so becomes a reconciling item in the bank reconciliation. A deposit in transit occurs when a deposit arrives at the bank too late for it to be recorded that day, or i... Read more
On the other hand, office equipment encompasses material items having a life of more than one year. The assets meeting a company’s capital threshold are treated as office equipment. Financial statements can be represented in a simple form or as... Read more
