CH 13

  1. Liabilities
    Probable future sacrifices of economic benefits arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a result of past transactions or events.
  2. Current Liabilities
    Obligations whose liquidation is reasonably expected to require the use of current existing resources properly classified as current assets, or the creation of other current liabilities.
  3. Account Payable (trade)
    Are balances owed to others for goods, supplies, or services purchased on open account.
  4. Typical Current Liabilities
    • Accounts Payable
    • Notes Payable
    • Current maturities of long term debt
    • Short term obligations expected to be refinanced
    • Dividends payable
    • Customer advances and deposits
    • Unearned revenue
    • Sales tax payable
    • Employee related liabilities
  5. Operating Cycle
    Period o time elapsing between the acquisition of goods and services involved in the manufacturing process and the final cash realization resulting from sales and subsequent collections.
  6. Notes Payable
    written promises to pay a certain sum of money on a specified future date
Card Set
CH 13