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ACC 331 Lecture Notes - Lecture 10: Treasury Stock, Promissory Note, Current Liability

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School
Elon University
Department
Accounting
Course
ACC 331
Professor
Linda Poulson

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Document Summary

Obligations that are expected to be paid o in one year (or less) or by the end of the operating cycle, whichever is longer, through the use of current assets or through the creation of other current liabilities. Obligations to suppliers of merchandise or of services purchased on an account expected to be paid within 30-60 days. Notes are taken out for a very speci c transaction. They are for speci c items such as a car payment. Obligations that have been incurred but have not been paid for yet. Unearned revenues, represent cash received from a customer for goods or services to be provided in a future period. You still owe the good or service to the customer. A portion of a note that can be paid o within the year or operating cycle, whichever is longer. Ex: monthly payment for a car loan.

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Related Questions

A current liability is a debt that can reasonably be expected to be paid

a. within one year, or the operating cycle, whichever is longer

b. between 6 months and 18 months

c. out of currently recognized revenues

d. out of cash currently on hand

Ā 

A current liability is a debt that is reasonably expected to be paid

a. within one year, or the operating cycle, whichever is longer

b. between 6 months and 18 months

c. out of currently recognized revenues

d. out of cash currently on hand

Ā 

Match the following:

1. Acid-test ratio

2. Current portion of long-term debt

3. Recording a contingent liability

4. Commercial paper

5. Deferred revenues

6. Line of credit

7. Accrual accounting

8. Interest expense

9. The riskiness of a business's obligations

10. Disclosure of a contingent liability

A Cash, short-term investments, and accounts receivable alldivided by current liabilities.

B Loss is probable and amount is reasonably estimable.

C Gift cards

D Long-term debt maturing within one year.

E Informal agreement that permits a company to borrow up to aprearranged limit.

F Interest expense is recorded in the period interest isincurred rather than in the period interest is paid

G Loss is reasonably possible and amount is reasonablyestimable

H Incurred on a notes payable

I obligations Unsecured notes sold in minimum denominations of$25,000 with maturities up to 270 days

J Classifying liabilities as either current or long-term helpsinvestors and creditors assess this.