We record this as an increase to the asset account Accounts Receivable and an increase to service revenue. During the month of February, Metro Corporation earned a total of $50,000 in revenue from clients who paid cash. Deferred rent is a liability account representing the difference between the cash paid for rent expense in a […]
Category Archives: Bookkeeping
This could indicate that the company has better collections, faster inventory turnover, or simply a better ability to pay down its debt. The trend is also more stable, with all the values being relatively close together and no sudden jumps or increases from year to year. An investor or analyst looking at this trend over […]
Contra assets decrease the balance of a fixed or capital asset, carrying a credit balance. Contra asset accounts include allowance for doubtful accounts and accumulated depreciation. Contra asset accounts are recorded with a credit balance that decreases the balance of an asset. A key example of contra liabilities includes discounts on notes or bonds payable. […]
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Since firms prefer to keep leases off the books, and sometimes prefer to defer expenses, there is a strong incentive on the part of firms to report all leases as operating leases. (d) if the present value of the lease payments, discounted at an appropriate discount rate, exceeds 90% of the fair market value of […]
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