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 […]
The expansion of the global market and the rise of e-commerce has led to some interesting challenges for international shippers. As logic would denote, the further away you’re shipping your freight, the more complicated the process becomes. To help simplify that, at least in part, international commercial laws have been established over ...
In other words, this ratio measures the degree to which the business’s operations are funded by debt. If the value is below one, it indicates that the company holds less debt. Financial ratios show you how a company is performing by comparing different financial metrics to each other. The cons of the use of financial […]
Small or private companies may also use financial accounting, but they often operate with different reporting requirements. Financial statements generated through financial accounting are used by many parties outside of a company, including lenders, government agencies, auditors, insurance agencies, and investors. An income statement can be ...
As we discussed above, when Congress passed FICA, the whole idea was to fund a retirement savings plan (Social Security) and insurance program (Medicare) for American workers. FICA, the Federal Insurance Contributions Act, refers to the taxes that largely fund Social Security retirement, disability, survivor, spousal and children’s ...