Bookkeeping

Effective Annual Rate EAR How to Calculate Effective Interest Rate

Similarly, it is true for investments and interest-bearing accounts to evaluate compounding interest earnings or gains. If the bill is not paid in full every month, one can end up paying interest not only on the principal amount but also on the interest that accrued in the previous month. Credit card users tend to shop …

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Break-Even Point Analysis Formula Calculator Example Explanation

As more or fewer units are sold, fixed costs allocated to each product can change. The total fixed costs are $50k, and the contribution margin ($) is the difference between the selling price per unit and the variable cost per unit. So, after deducting $10.00 from $20.00, the contribution margin comes out to $10.00. On …

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Understanding Accounts Payable AP With Examples and How to Record AP

To avoid owing interest, make sure payments are being processed within the time frame outlined by the supplier in the payment terms. For example, if a supplier includes net 30 terms on its invoice, this means the payment must be received within 30 days of the invoice date. When https://www.quick-bookkeeping.net/ the invoice is received by …

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Debt Service Coverage Ratio DSCR Formula + Calculator

Total debt service refers to current debt obligations, meaning any interest, principal, sinking fund, and lease payments due in the coming year. On a balance sheet, this will include short-term debt and the current portion of long-term debt. Of course, the lending decision is not based on the debt service coverage ratio (DSCR). The commercial …

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Vacation Accrual Journal Entry: How to Record Accrued Time Off

Record $100 as a journal entry by debiting Vacation Payable and crediting the Cash account (5 hours x $20 per hour). You can structure leave accrual differently for each type of employee. You might allow team members to accrue additional time based on seniority or years of service—for example, getting an extra 8 hours of …

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