Current Liabilities Flashcards
Defined as present obligations arising from past events. Their settlement results in an outflow of resources
Liabilities
When are current liabilities due?
Within one year or operating cycle, whichever is longer
It is defined as the amounts due to suppliers relating to the purchase of goods and services
Accounts payable
It is defined as the formal short-term borrowings usually evidenced by specific written promises to pay
Notes payable
These are known to be uncertain or potential obligations
Contingent liability
Rules specify that ________ should be recorded in the accounts when it is probable that the future event will occur and the amount of the liability can be reasonably estimated
Contingent liabilities
Noncurrent liabilities have a maturity period of
More than 1 year
Debt of long duration is reported as
Long-term liability
At the end of any given year, the current portion of long-term debt must be recorded as _____ during the following year
Current liability
The _____ interest would also be reported as a current liability
Accrued
______ are secued by some form of security from the business
Loans
It is the loan amount borrowed
Principal
Base rate plus variance
Intrest
It is the length of time the principal is to be paid
Amortization
It is the assets charged by the bank to secure the loan including personal guarantee
Security or collateral
