For instance, a business might decide that gift cards unredeemed after two years can be classified as breakage. This period can vary depending on the industry and the company’s historical redemption data. If a customer uses only a portion of the gift card’s value, the company must adjust the liability and recognize revenue ...
Long-term liabilities include items like long-term bank loans and other debt borrowings the firm has made and still owes. Most firms need to borrow to start a firm, but depending on the individual firm’s fiscal policies and financial plans, may choose to pay it off, and, therefore, it does not appear on all firms’ balance […]
At the end of the contract, you can choose to keep the car and become its legal owner by paying a final “option to purchase” fee. This will often be smaller than your usual monthly repayments and can be as little as £10, but you should check the terms of your contract to see exactly how much you would need to pay. Purchasing cars ...
In accrual accounting, they are considered liabilities, or a reverse prepaid expense, as the company owes either the cash paid or the goods/services ordered. Since deferred revenues are not considered revenue until they are earned, they are not reported on the income statement. Thus, even though you received the revenue in your account, you ...
In addition to your monthly mortgage principal and interest, you’ll be paying for homeowners insurance and property taxes, and perhaps homeowners association fees. Unless you’re an expert on your local real estate market and on home financing, check with a Realtor or real estate attorney before buying a seller-financed home. The ...
The personal trainers enters $2000 as a debit to cash and $2000 as a credit to unearned revenue. At the end of the month, the owner debits unearned revenue $400 and credits revenue $400. Revenue recognition is a generally accepted accounting principle that dictates how revenue is accounted for. According to GAAP, unearned revenue is ...