Term
| Short-term (current) liabilities |
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Definition
| meet obligations within the year or operating cycle, reported at present value |
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Term
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Definition
| More than one accounting period or operating cycle |
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Term
| Liability Characteristics |
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Definition
-Probable future economic outflows
*risk
*bankruptcy
*return
-result from present obligations
-result from past transactions |
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Term
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Definition
| Assets - Liabilities = Owner's Equity |
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Term
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Definition
Do we have enough assets to cover liabilities?
current assets / current liabilities |
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Term
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Definition
| obligations to suppliers of merchandise or of services purchased on open account |
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Term
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Definition
| a more formal agreement that usually requires the firm to pay a commitment fee to the bank |
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Term
| Journal Entry for a note issued for cash |
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Definition
Cash XXX
Notes Payable XXX |
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Term
| Journal Entry for interest on notes |
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Definition
Interest expense XXX
Notes payable XXX
Cash XXX |
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Term
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Definition
| a specified asset of the borrower is pledged as collateral or security for the loan |
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Term
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Definition
| existing, uncertain, situation involving potential loss depending on whether some future event occurs |
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Term
| Journal entry for borrowing $7 million cash from First City Bank under the line fo credit arranged in July and issued a none-month promissory note. Interest at the prime rate of 12% was payable at maturity. |
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Definition
Cash 7,000,000
Notes payable 7,000,000 |
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Term
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Definition
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Term
| Loss contingency journal entry |
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Definition
Loss - litigation XXX
Liability - litigation XXX |
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Term
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Definition
| Confirming event is likley to occur |
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Term
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Definition
| The chance the confirming event will occur is more than remote but less than likely |
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Term
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Definition
| The chance the confirming event will occur is slight |
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Term
| An example of an accrued liability journal entry |
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Definition
Wage Expense XXX
Wages Payable XXX |
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