AEM 2210 Study Guide - Final Guide: Federal Unemployment Tax Act, Effective Interest Rate, Accounts Payable

• School: Cornell University
• Department: Applied Economics & Management
• Course: AEM 2210
• Professor: Zeshawn Beg

Document Summary

Liability: probable future sacrifice of economic benefits that arise from past transactions. When a liability is first recorded, it is measured at its face value (eg. present value). Interest paid in the future is not included in the recorded liability amount because it is paid over time. Measures how quickly a firm pays its suppliers. Is usually divided by 365 days to show how many days it takes, on average, for a firm to pay (average number of days payables are. Expenses that have been incurred but have not been paid at the end of the accounting period (ex. Must first debit compensation expense and credit. When employees then take vacation time, debit. Definition: a company borrows money and signs a formal written contract, reporting the amount as a note payable. Time value of money: interest that is associated with the use of money over time; the reason why creditors issue loans. Principal x annual interest rate x number of.