Bad debt expense occurs when a company experiences a loss due to products sold or services provided that they ultimately do not receive payment for. The bad debt expense only relates to transactions that involve a company’s accounts receivable account. There are two methods that a company may use to account for bad debt expense:… Read More
Tag: Finance
Cash Basis vs. Accrual Basis Accounting
There are typically two methods companies use to account for transactions, known as the cash basis and the accrual basis methods of accounting. The main difference between these methods of accounting is when revenue and expenses are recognized by a company. Cash Basis: A company that uses the cash basis of accounting recognizes revenue as… Read More
Gift Card Revenue and how it’s Recognized
Now that the holidays have passed, it’s time for everyone to start spending the gift cards they received. Companies all over, from Best Buy to Walmart make a killing during the holiday season from the sale of gift cards. Gift cards have become such a big money maker for companies that many of them now… Read More