Term
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Definition
| probable future sacrifices of economic benefits arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a result of past transactions or events |
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Term
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Definition
| obligations whose liquidation is reasonably expected to require use of existing resources properly classified as current assets or the creation of other current liabilities |
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Term
| Three characteristics of a liability |
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Definition
It is a present obligation that entails settlement by transfer/use of cash, goods or services
It is an unavoidable obligation
The transaction or other event creating the obligation has already occurred |
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Term
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Definition
| written promises to pay a certain sum of money on a certain date |
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Term
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Definition
| Balances owed to others for goods supplies, or services purchased on open account |
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Term
| Short term obligations expected to be refinanced |
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Definition
Company must intend to refinance
Demonstrate the ability to refinance debt (financial agreement)
by the financial statement issue date (auditor signs opinion letter |
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Term
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Definition
current liability
promise to pay shareholders within one year |
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Term
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Definition
| depend on the occurrence of future events to determine either the amount payable, the payee, or its existence |
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