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Characteristics of Liabilities
Interesting Facts
100
Obligations due within one year
What is a "Current Liability"
100
As an end of the period adjustment.
When/how is interest expense recorded?
200
Amounts owed to suppliers.
What is an "Accounts Payable"?
200
360 days.
What is the commonly used number of days in the year for interest calculations?
300
Cash received in advance for services to be performed at a later date
What is "Unearned Revenue"?
300
The difference between the amount borrowed and the amount repaid.
What is "Interest"?
400
Debit Cash for $525 Credit Sales for 500 Credit Sales Tax Payable for $25
What is the entry to record the sale of $500 of merchandise for cash, including 5% sales tax?
400
The amount of interest due from borrowing $5,000 for 60 days at 7.5%.
What is $62.49?
500
A written promise to pay a specified amount on a definite future date within one year.
What is a "short-term notes payable"?
500
Face Value, Term of Loan, Interest rate.
What three pieces of information is needed to calculate interest?