Other Liabilities and Debt Covenants Flashcards
1
Q
How can a purchase be recorded in trade accounts payable?
A
Gross or net method
2
Q
When should sales taxes payable be credited?
A
After collection and until remitted
3
Q
Are sales taxes an expense of the company?
A
No
4
Q
What value must notes be recorded at?
A
Present value
5
Q
Are discounts or premiums classified as deferred charges or credits?
A
No
6
Q
Common debt covenants include the following?
A
Limitations on issuing additional debt, restrictions on the payment of dividends, limitations on the disposal of certain assets, minimum working capital requirements, collateral requirements, limitations on how the borrowed money can be used, and maintenance of specific financial ratios
