The operating cycle is the number of days between when a company has to spend money on inventory versus when it receives money from the sale of that inventory. Some sectors, like manufacturing, have longer production cycles, meaning it takes more time to generate cash from their core operations. These industries will have higher working […]
Category Archives: Bookkeeping
In other words, you take the expense off the books until you pay for it later in the month. The employees’ 401(k) contribution is deducted from their pretax payroll. The retailer will accomplish this by preparing an accrual adjusting entry dated as of December 31. Record the expense on the last day of the month […]
If a company purchases office equipment for $20,000 and the invoice has credit terms of 1/10, net 30, the company can deduct $200 (1% of $20,000) and remit $19,800 if the invoice is paid within 10 days. If that occurs, the company will record the equipment at its cost of $19,800. However, in the net […]
In most instances, the issuer agrees to pay back the loan by a specific date and make regular interest payments until that date. Money market funds and the Vanguard Cash Plus Account allow you to easily transfer money between your bank and Vanguard accounts. As a global investment manager and fiduciary to our clients, our […]