Bookkeeping 101

With a variable annuity, you put in money that’s already been taxed and then the account grows tax deferred. That means you’ll have to pay income taxes on whatever growth the annuity makes when you start taking money out in retirement. Unlike a fixed…

Then for a loan with monthly repayments, divide the result by 12 to get your monthly interest. Subtract the interest from the total monthly payment, and the remaining amount is what goes toward principal. For month two, do the same thing, except star…

The accountant debits an asset account for accrued revenue which is reversed when the exact amount of revenue is actually collected, crediting accrued revenue. Accrued revenue covers items that would not otherwise appear in the general ledger at the …

The calculation of this estimate is based on a number of factors, such as historical prepayment rates for previous loans similar to ones in the pool and future economic outlooks. These calculations are important when evaluating assets like mortgage-b…

The same goes for writing IN ALL CAPS or using exclamation points, especially if the memorandum is conveying news that may upset people. Business memorandum or memoranda — also called memo or memos — are specially formatted written communications wit…

These are the costs a company pays for holding inventory in stock before it is sold to customers. For example, a company that sells frozen foods needs to pay for refrigerated storage facilities, utility costs, taxes, employee expenses, and insurance….

An extreme example would be if Apple decided to pay off $70 billion of its term debt, which totals approximately $93 billion listed on the balance sheet. The company would record the cash outlay of $70 billion dollars within the financing activities …

Like the Currency format, the Accounting format is used for monetary values. But, this format aligns the currency symbols and decimal points of numbers in a column. In addition, the Accounting format displays zeros as dashes and negative numbers in p…

Consequently, a lawyer may not be able to form a conclusion with respect to such matters. In such circumstances, the auditor ordinarily will conclude that the financial statements are affected by an uncertainty concerning the outcome of a future even…

Examples of accounts payable include accounting services, legal services, supplies, and utilities. Accounts payable are usually reported in a business’ balance sheet under short-term liabilities….