Unit 7 Discussion .docx - Discussion Topic Time Value of...

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Discussion Topic: Time Value of Money How does the time value of money have an effect on the role of an accountant? What are the key items that an accountant must understand around present and future value concepts, annuities, and compound interest? - The time value of money states that receiving cash today is worth more than receiving it in the future because you could be earning interest on the money that is present in hand. So, this as an accountant means that we must ensure our clients know that in order for them to receive the most amount of return, the cash they have today needs to be invested to make cash for tomorrow. It is our job to make sure that we are making the best use for our clients’ money. (Intermediate Accounting, 2020) - To be able to make informed decisions for the clients accounting needs, we must understand the concepts around present and future value. Basic time value concepts that we must understand are the nature of interest, simple and compound interest,

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