ADMS 2500 : Review Note

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maroonelk473

18 Jan 2012

School

York University

Department

Administrative Studies

Course

ADMS 2500

Professor

John Kucharczuk

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ishvindersinghsandhu and 38251 others unlocked

ADMS 2500 Full Course Notes

Verified Note

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Document Summary

Liability- future payments of present obligation of past transaction & can be estimated (payable, unearn rev, taxes) Current liability- within 1yr or next operating cycle, whichever longer. Short-term note payable- current obligation note (replace payable, obtain bank loan, purchasing) Warranty- agreement obligates seller to pay repair, replace product (recognize warranty expense & liability warranty at time of sale) Contingent liability- potential future liability from past events. Uncertainty doubtful acc- not contingent a relative to business activity. Bond- written promise to pay par value of bond w/ interest at annual amount. Advantage: don t affect shareholders, interest tax deductible, increase equity. Disadvantage: payments of annual interest & par value, decrease on equity. Par value- can change up/down, lower price if not selling. Interest rate- contract rate, coupon rate, nominal rate (annual amount=par value x interest rate) Secured bonds- assets pledge as collateral (if not paid can take assets) Unsecured bonds- earns capacity & credit (loan on credit/ high risk)

Related Questions

Listed below are several terms and phrases associated with current liabilities. Mach each List A to B

List A

1, Cash, current investments, and A/R all divided by current liabilities.

2, Payment is probable and can be reasonably estimated.

3, Gift cards

4, Long-term debt maturing within one year

5, Social Security and Medicare

6, Interest expense is recorded in the period interest is incurred rather than in the period interest is paid.

7, payment is reasonably possible and can be reasonably estimated.

8, Incurred on a notes payable.

9, Unsecured notes sold in minimum denominations of $25,000 with up to 270 days.

10, Classifying liabilities as either current or long-term helps inverstors and creditors assets this.

List B

a, Recoding a contingentliability

b, disclosure of a contingent liability

c, Interest expense

d, FICA

e, Commercial paper

f, The riskiness of a business's obligations

g, Current portion of Long-term debt

h, Unearned revenue

i, Acid=test ratio

j, Accual Accounting

chocolatewoodchuck193

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.

amaranthwasp103

When a company is obligated for sales taxes payable, it is reported as a(n):

a. Estimated liability

b. Contingent liability

c. Current liability

d. Business expense

e. Long-term liability

sapphiremammoth590

ADMS 2500 : Review Note

ADMS 2500 Full Course Notes

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