ACG 2021 Study Guide - Final Guide: Double Taxation, Initial Public Offering, S Corporation
Document Summary
Commercial paper: borrowing from another company rather than from a bank. Contingencies: uncertain situations that can result in a gain or a loss for a company. Contingent liability: an existing uncertain situation that might result in a loss. Current liabilities: debts that, in most cases, are due within one year. However, when a company has an operating cycle of longer than a year, its current liabilities are defined by the length of the operating cycle, rather than by the length of one year. Current portion of long-term debt: debt that will be paid within the next year. Liability: a present responsibility to sacrifice assets in the future due to a transaction or other event that happened in the past. Line of credit: an informal agreement that permits a company to borrow up to a prearranged limit without having to follow formal loan procedures and prepare paperwork. Notes payable: written promises to repay amounts borrowed plus interest.