BUS 251 Chapter Notes - Chapter 9: Current Liability, Revolving Credit, Remittance

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 251
• Professor: Susan Bubra

Document Summary

Company expects to setle it through ouflow of resources that represent future eco beneits. Obligaion results from an event that has already happened. Time value of money: dollar paid in the future is worth less than the dollar paid today. Provision: indicates liabiliies whose amounts have been determined using a signiicant degree of esimaions. Bank uses subsequent cash deposits by company to repay loan. Revolving credit faciliies: you can write cheques and make withdrawals up to your overdrat. Short term loan secured by inventory or a/r or both (lending based on amount of a/r and inv). Loan is secured when assets (collateral) are pledged against the loan guaranteeing repayment. Long term loans require blended payments of principal plus interest. Porion of principal payment due within next 12 months: current porion of ltd. Reclassiicaion entry: without this cl would be understated and current & quick raios afected.