ACCTG 201 Chapter Notes - Chapter 8: Accounts Payable, Promissory Note, Current Liability
Document Summary
Current liabilities: liability a present responsibility to sacrifice assets in the future due to a transaction or other event that happened in the past. Accounts payable: accounts payable amounts the company owes to suppliers of merchandise or services that it has bought on credit. 2: current portion of long-term debt the amount that will be paid within the next year. Contingent liabilities: contingent liability an existing uncertain situation that might result in a loss depending on the outcome of a future event. Contingent gains: contingent gain an existing uncertain situation that might result in a gain, which often is the flip side of contingent liabilities, we do not record contingent gains until the gain is certain. Analysis: liquidity having sufficient cash (or other current assets convertible to cash in a relatively short time) to pay currently maturing debts, working capital = current assets current liabilities.