Term
| What are some characteristics of liabilites? |
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Definition
1. Future sacrifices of economic benefits.
2. Arise from present obligations to other entities.
3. Are results of past transactions or events. |
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Term
| On average a current liability is payable with in, how long? |
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Definition
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Term
| What does Accounts Payable mean? |
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Definition
| Accounts payble is an obligation to the suppliers of the merchandise or services that are purchased on an open account. |
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Term
| What is the usual payment for an accounts payable? |
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Definition
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Term
| What is the usual payment for an accounts payable? |
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Definition
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Term
| How does trade notes payable differ from accounts payable? |
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Definition
| A trade note payable is recognized by a promissory note and they have to longer term and also may include interest. |
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Term
| What is a line of credit? |
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Definition
| A line of credit is the ability for a company to borrow money without the formal procedures and paperwork of a loan. |
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Term
| What is a committed line of credit? |
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Definition
| A committed line of credit is a formal arrangement that typically requires a commitment fee and sometimes a compensating balance. |
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Term
| What is the basic formula for interest on a note payable? |
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Definition
| Face Amount * Annual Rate * Time to Maturity |
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Term
Prepare two jounal entrys one for note payable and another for the interest expense.
A company borrows $100,000 cash from Citizens Bank under a noncommitted short-term line of credit arrangement and issued a 5 month , 10% promissory note. The interest |
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Definition
Cash 100,000
Notes payable 100,000
Int. exp.(100,000*.1*5/12) 4,167
Notes payable 100,000
Cash 104,167 |
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Term
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Definition
| A secured loan means that a specific asset of the borrower is used as collateral or security for the loan. |
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Term
| What do accrued liabilities represent? |
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Definition
| Accrued liabilities represent expenses the are already incurred but are not yet paid. |
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Term
| What types of assets typically have refundable deposits? |
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Definition
| Apartments, returnable containers, etc. |
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Term
| A short-term obligation may be reported as a noncurrent liability if.. |
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Definition
1. the company intends to refinance on a long-term basis.
2. the company demonstrates the ability to do so by a refinancing agreement or by actual financing. |
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Term
| Define loss contingencies. |
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Definition
| Existing situation that involves potential loss depending on whether some future event occurs. |
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Term
| A contingency is accrued and reported as a liability depending on... |
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Definition
1. the likelihood that the congriming event will occur.
2. what can be determined about the amount of loss. |
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Term
| Are gain contingencies accrued? |
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Definition
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