Current Liabilities
This type of liability arises when a business receives goods or service on credit without interest or a formal contract
What is account(s) payable?
What makes a liability contingent?
The amount a borrower must repay at maturity of a bond
What is par/face value?
This method spreads the premium/discount equally over the interest periods
What is the straight-line amortization method?
The account "Premium on Bonds Payable" appears on the _______ directly under _______
What are balance sheet and bonds payable?
Liabilities that represent completed portions of ongoing activities, such as interest or taxes owed, and are recognized by adjusting entries.
What are accrues liabilities (____ payable)?
For a contingent liability to be recorded, the event must be probable and ____
What is reasonably estimatable?
Bonds that allow the issuer to repay early are known as
When using the effective interest method, interest expense is found by multiplying
What is carrying value * yield/market rate * time(years)
Answers will vary
Occurs when a business receives payment before delivering goods or providing services.
What is unearned revenue?
Warranty expense is recorded in which period
What is in the period of the related sale? What is in the period where it generated revenue?
When the stated interest rate is lower than the market rate, the bond will sell at a ____
What is a discount?
What is an amortization table?
This accounting principle requires expenses to be recorded in the same period as the related revenues
What is the matching principle?
A company collected sales tax at the time of sale. What is the correct journal entry "piece" that affects liabilities?
What is to increase Sales Tax Payable with a credit?
When warranty claims are paid, this happens to the warranty liability account
What is a decrease/debit?
What are issuance, interest payments, and principal repayment?
This term describes the systematic reduction of an account balance over the life of something?
What is amortization?
When calculating the liquidity ratios, it is important to not forget this piece of current liabilities requires some special attention to dates
What is the current portion of long term debt?
What is disclose in the notes to the financial statements?
Carrying value on a discount bond moves in what direction over time?
What is up towards face value?
A company issues bonds at a premium. Over the life of the bonds, what is the relationship between interest expense and the cash paid?
What is (current assets - inventory) / current liabilities?