ACCT 217 Lecture Notes - Lecture 21: Current Liability, Financial Instrument, Inventory Turnover
3 Jul 2015
School
Department
Course
Professor
Document Summary
Obligations to be paid after one year or longer. Also known as financial liabilities (a type of financial instrument): A contractual obligation to pay cash in the future. Normally repayable in a series of periodic payments called instalments. Instalment payments usually take one of two forms: Fixed principal payments plus interest (fixed or floating interest) Fixed principal payments balance by the interest rate. Blended payments principal balance by the interest rate. Loan is repayable in equal periodic amounts plus interest. Monthly interest expense is calculated by multiplying the outstanding principal. Loan is repayable in equal periodic amounts including interest. Monthly interest expense is still calculated by multiplying the outstanding. Can be listed separately on statement of financial position or detailed in the notes. Report separately in statement of financial position and detail in notes. Liquidity measure short-term ability to pay maturing obligations and meet cash. Solvency measure ability to meet long-term obligations:
