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Advance Payment When you hear the phrase advance payment , what springs to mind first? A deposit , maybe? Paying before you’ve received anything? There’s more to this concept than that. Businesses, banks , governments—everyone uses advance payments in one way or another. Understanding how they work, when they make sense, what risks they carry, is essential if you deal with contracts , projects , or simply large purchases . Let’s explore what advance payments are, how they play out, and why they matter in finance and everyday business . What is an Advance Payment? At its simplest, an advance payment (sometimes called “advance”) is money paid ahead of schedule—for goods, services, or work not yet delivered. You pay first; you get later. That’s the basic deal. This could be a deposit, part payment, or full payment—depending on how the contract or transaction is set up. In many cases, it’s partial: the buyer commits some funds up front so that the seller has working capital or security. ...

Accrual Accounting Accrual accounting: it sounds technical, maybe a bit dry — but once you understand it, you see how foundational it is to real business decision‑making , reporting , forecasting , and credibility . You may have heard of businesses that “look profitable but have no cash,” or ones that report big numbers but collapse because bills come due. Accrual accounting helps avoid surprises like that, by making sure financial statements reflect economic reality , not just when cash physically moves. what exactly is accrual accounting? It’s an accounting method where revenue is recognized (recorded) when it is earned, and expenses are recorded when they are incurred — regardless of when cash is actually received or paid. That means if you deliver a service in December but the client pays in January, accrual accounting records the revenue in December. If you incur a cost in December but pay in January, that cost also shows up in December. This contrasts with cash‐basis accountin...

Accretion What Is Accretion in Finance? In simple terms, accretion in finance refers to a gradual increase in the value of something over time. That “something” could be the book value of a bond , the present value of a liability , or even a company's earnings per share after a merger. Think of accretion as value being added slowly and steadily — not from sudden market changes, but from time itself doing its work. For example, a bond purchased at a discount will slowly rise in value as it approaches its maturity date. That steady climb is accretion. Accretion shows up in a few key areas: In bonds , especially zero-coupon bonds , it’s the way the bond’s value increases until it reaches its full face value at maturity. In M&A , accretion describes what happens when an acquisition increases the buyer’s earnings per share — a good sign, generally. In accounting , it applies when the value of a liability grows over time due to the unwinding of discount rates — common with ...