Acounting Chapter 9
Terms
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accrued liabilities
- expenses that have been incurred but have not been paid at eh end of the accounting period
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an operating lease
- does not meet any of the four criteria established by GAAP and does not cause the recording of an asset and liability
- annuity
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a series of periodic cash receipts or payments that are equal in amount each interest period.
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capital lease
- meets at least one of the four criteria established by GAAP and results in the recording of an asset and liability
- contingent liability
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a potential liability that has arisen as the result of a past event; not an effective liability until some future event occurs
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current liabilites
- short-term obligations that will be paid within the current operating cycle or one year, which ever is longer
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deferred revenues
- revenues that have been collected but not earned; they are liabilites until the goods or services are provided
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deferred tax items
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exist because of timing differences caused by reporting revenues and expenses according to GAAP on a company's income statement and according to the Internal Revenue Code on the tax return
- future value
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the sum to which an amount will increase as the result of compound interest
- liabilites
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probable debts or obligations that result from past transaction, which will be paid with assets or services
- liquidity
- the ability to pay current obligations
- long-term liabilities
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all of the entity's obligations not classified as current liabilites
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present value
- the current value of an amount to be received int he future; a future amount discounted for compound interest
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temporary differnces
- are timing differences that cause deferred income taxes and will reverse, or turn around, in the future
- time value of money
- interest that is associated with the use of money over time
- working capital
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the dollar difference between total current assets and total current liabilties