How to Use the Future Value Formula

The Internal Revenue Service imposes a Failure to File Penalty on taxpayers who do not file their returns by the due date. The penalty is calculated as 5% of unpaid taxes for each month a tax return is late up to a limit of 25% of unpaid taxes. Why is the same amount of money […]

MILLION Definition & Meaning

Countries in continental Europe and Latin America use the long scale where a billion is a million millions (1012). There is also a “long scale,” which is used in France and was previously used in the United Kingdom, in which a billion means one million million. According to this definition of a billion, the number […]

How to Calculate Direct Labor Cost

If the hourly rate is $17, and it takes 0.2 hours to produce a single product, the direct labor cost per product is $3.4 ($17 x 0.2). Tracking the labor cost percentage is the key to solid business management and growth. This key metric displays the overall labor cost as a proportion of gross sales, […]

Present Value Calculator NPV

Thus, the $10,000 cash flow in two years is worth $7,972 on the present date, with the downward adjustment attributable to the time value of money (TVM) concept. All future receipts of cash (and payments) are adjusted by a discount rate, with the post-reduction amount representing the present value (PV). Moreover, the size of the […]

Accounting Principles Explained: How They Work, GAAP, IFRS

Liabilities are everything that your company owes in the long or short term. Your liabilities could include a credit card balance, payroll, taxes, or a loan. To become a public accountant, you’ll typically need to become a CPA and have a four-year degree in accounting from an accredited college or university. In addition to passing […]

Accounting Principles: Basic Definitions, Why Theyre Important

Let’s see how Bookkeeping, Accounting, and Accountancy are different from each other. The following Basics of Accounting theory notes are prepared by Testbook experts with an intent to guide accounting aspirants with useful and most relevant information for exam preparation. The 35-member Financial Accounting Standards Advisory Council (FASAC) monitors the FASB. FASB is responsible for […]