Companies record gifts cards sold as liabilities, because ultimately they will need to redeem the gift cards and provide products or services to customers. Here is a link to my article about revenue recognition for gift cards in Journal of Accountancy: Lost and found.
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Posts by accountinator
Managing Materiality
Accounting information is material if its omission or misstatement would mislead investors. In other words, if there’s a piece of information that investors need to know, then that information is material – it makes a difference. Information can be material in size or importance. In size, materiality is all about the amount. A large amount of […]
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Understanding confirmatory value
In accounting, information has confirmatory value when it helps users to confirm or adjust prior expectations. But why is confirmatory value an important attribute for accounting information to have? The importance of confirmatory value People read accounting financial statements in order to create predictions about the future. They want to predict future dividends and that the company […]
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Relevance in accounting
Accounting information is relevant (“accounting relevance”) when it is capable of making a difference in a decision. Suppose that you’re trying to decide what to eat for dinner: A hamburger? Or a salad? What information is relevant to your decision? The number of calories? The price of each meal, perhaps? Do you have the food ready […]
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When does accounting information have “predictive value?”
In accounting, information has predictive value when you can use it to form expectations about the future. Using the future to predict the past How should investors make decisions about loaning money to a company, or investing in its stock? High quality accounting information helps investors to make these decisions. When you think about it, investors really want […]
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What is the economic entity assumption?
The economic entity assumption is one of four assumptions underlying financial statements. It says that you can identify economic activity with a particular unit of accountability. Put another way, the economic entity assumptions says that certain transactions are inside a business, while other transactions are outside of the business. Suppose that you run a candy […]
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Introduction to Excel Part 4 (YouTube): Formatting your Excel Spreadsheet
I’m excited to introduce the fourth video in my series explaining how to use to Excel. Learn to format your cells with different fonts. How to get your cell widths and heights right. And how to format numbers and dates. In 10 minutes you can learn all this, and more. Did I mention it’s free?
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Introduction to Excel Part 3 (YouTube)
This video explains how to use references, operators and formulas in Excel. Look out Francis Ford Coppola: Here’s the whole series, so far: Part 1: http://youtu.be/HPLuvEL3fNw Part 2: http://youtu.be/ckoxo6xCvik Part 3: http://youtu.be/DjOuAO1GDy8
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Introduction to Excel Part 2: Finding Your Way Around (YouTube)
With great multimedia fanfare comes Part 2 of my new Excel series: Here are all the videos available so far: Part 1: http://youtu.be/HPLuvEL3fNw Part 2: http://youtu.be/ckoxo6xCvik Part 3: http://youtu.be/DjOuAO1GDy8
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My new Introduction to Excel (YouTube)
I’m proud to announce the first video of my Introduction to Excel series. This series is designed to give you the basic tools you need to get up and running in Microsoft Excel. Here are the videos released so far: Part 1: http://youtu.be/HPLuvEL3fNw Part 2: http://youtu.be/ckoxo6xCvik Part 3: http://youtu.be/DjOuAO1GDy8 Subscribe to my YouTube channel to received new videos […]
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