Calculate Internal Rate of Return

The internal rate of return (IRR) is defined as the rate of return an investment project creates over its entire life. It is computed by finding that discount rate that results in a zero net present value for the project.


Additional Accounting Links:
Calculate Accounting Average


Useful External Links:

Online NPV Calculator
Calculate IRR using Excel

Purchase Raw Materials Journal Entry

Use the following information to record the purchase raw materials in the accounting ledger.
When you receive the ship, you are obligated to pay cash or a agree on paying at a later date

Both transactions require these accounting journal entries to keep the ledger in check.

1. Increase raw materials inventory with credit
   
2. Decrease cash account with debit
   
3. Increase accounts payable with credit
   

Additional Accounting Tutorials and Accounting Examples:

What are Direct Materials?
What are Indirect Materials?
FIFO Method and Weighted Average Inventory Method
Perpetual Inventory System
Basic Equation for Inventory Accounts
Inventory Cost Flow Assumptions
Accounting Inventory Shrinkage Example Problem
Merchandising Accounting Journal Entry

Prepaid Expenses and Unearned Revenues

In accounting, prepaid expenses and unearned revenues are considered prepayments by accountants. That is defined as money has exchanged hands but the expense or revenue is not recorded due to the expense has not been incurred yet or the revenue has not been earned yet by the company.

Examples of prepaid expenses and unearned revenues

• Prepaid Expense - A year long insurance contract a company paid $12,000 for at the beginning of the year. Since the insurance company owes the company service, the expense prepayment is recorded as an asset (Journal Entries: debit Prepaid Insurance and credit Cash).

• Unearned Revenue - A year long subscription of $12,000 is received in advance by a magazine company. Because the company owes something, the unearned revenue is recorded as a liability (Journal Entries: debit Cash and credit Unearned Revenue).

Advantages and Disadvantages of Globalization

What is globalization and what are some of its advantages and disadvantages?

In recent decades, globalization has been defined as an economic force driving worldwide economic integration and the expanding of businesses beyond their domestic borders. The worldwide trend of diminishing trade barriers, increased technology, and reduced shipping costs have promoted a prosperous era of world trade. Companies are no longer limited to their domestic boundaries and may conduct business anywhere in the world. Some benefits of globalization include lower prices and job creation.

Manufacturing activities can be performed where labor and supplies are cheapest leading to reduced consumer costs. Jobs can be created in poorer economies that eventually lead to prosperous economic growth. Yet the effects of job creation and globalization are like a double edged sword. Jobs often are eliminated in countries with higher costs and out-sourced to countries with lower cost structures.

This has been viewed as one of the main disadvantages of globalization and a point of contention between employees of multinational companies. However, many of these benefits continue to outweigh its disadvantages therefore the world will continue to see globalization rise as a powerful global economic force.

What is Working Capital Management

Working capital management relates to the short-term management of a firm's short term assets and liabilities. For example, inventory is considered a short-term asset and accounts payable is categorized as a short-term liability that shows what the firm owes to other entities.