Unearned revenue, sometimes referred to as deferred revenue, is payment received by a company from a customer for products or services that will be delivered at some point in the future. The term is used in accrual accounting, in which revenue is recognized only when the payment has been received by a company AND the […]

There are specific accounting rules that dictate when, how, and why a company recognizes revenue. However, a company may not be able to recognize revenue until they’ve performed their part of the contractual obligation. The liability exists because the company has an obligation to the customer to deliver the goods or perform the services in […]

Whether it’s a large amount of money or a box of staples here and there, employee fraud always hurts your business’s bottom line. In a 2012 case, the CFO of a Louisiana-based company requested a six-figure payroll advance to cover the costs of his divorce. The advance was granted, but the CFO left the company […]

For the RA271, Honda built their own engine and chassis, something only Ferrari and BRM – of the other teams still running in 1962 – had previously done. As an engine manufacturer, Honda has won six World Constructors’ Championships, six World Drivers’ Championships and over 80 Grands Prix, ranking fifth in Formula One history. In […]

The GASB establishes accounting and financial reporting standards for U.S. state and local governments that follow generally accepted accounting principles (GAAP). The Governmental Accounting Research System (GARS) provides access to those standards. The FASAB was established to improve government accountability by issuing federal financial accounting and reporting standards that adhere to industry best practices. Its […]

Disclosures related to accounting errors typically include a description of the error, the periods affected, the amounts involved, and the impact on the financial statements. This information is often presented in the notes to the financial statements, which accompany the primary financial documents such as the balance sheet, income statement, and cash flow statement. Disclosures […]

And while it’s true that accrual accounting requires more work, technology can do most of the heavy lifting for you. You can set up accounting software to read your bills and enter the numbers straight into your expenses on an accrual basis. And if you run a hybrid accounting system, smart software will allow you […]

For companies required to comply with GAAP standards, the accrual-basis method is the preferred form of accounting. Simplicity can work for individuals or very small businesses, but not as much as a company expands. Therefore, it might make sense for a small business to start with the cash-basis approach and switch when the company requires […]

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