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Accrued salaries are salaries which has been incurred but not yet recorded in the accounting ledgers at the end of the accounting period.
This accrued salaries journal entry example shows how to record an accrued expense for salaries when an employee has carried out work during an accounting period but has not been paid by the end of the accounting period.
As regular payments will clear a loan balance over the term, the present value (PV) of the payments must be equal to the value of the loan. It follows that the remaining balance on an loan can be calculated by calculating the present value (PV) of the outstanding loan repayments.
When a business receives a cash advance from a customer for goods not yet delivered, it needs to record this a balance sheet liability and not revenue. When the goods are delivered, the revenue is earned, and the cash advance can be used to clear the balance on the customer accounts receivable account.
A business purchases land and buildings for 650, and pays 350 in cash and issues a 5% note payable for the balance of 300, which is secured by a mortgage on the property. The journal entry to record the initial purchase of the property using a combination of cash and notes payable is as follows:
Gift cards accounting involves establishing a liability for the obligation to provide goods at a future date. A customer can redeem gift cards and the liability is reduced due to gift card revenue recognition. Not all gift cards are redeemed and the business needs to estimate the revenue (breakage) to be released proportionately as other gift card balances are redeemed by customers.