| A | B |
|---|
| Current Liability 1 | obligation satisfied w/in 1 yr or op cycle, whichever longer |
| Current Liability 2 | Satisfied from existing CA or through creation of other CL |
| Note Payable | If note due w/in 1 yr of BS, = CL |
| Current maturities of long term debt | portion of the debt to be paid later remains as LTL |
| Taxes Payable | retailer usually collects and remits to state |
| Unearned revenues (other CL) | customer deposits, sales of future services |
| Accrued liabilities | owed but not yet on balance sheet prior to adjusting entries |
| Where to record contingent liabilities | in financial statements if probable and can be reasonably estimated |
| Contingent Liability | L that does not have a certain result yet |
| Long-Term Liabilities | Liabilities expected to be paid after 1 yr from BS date |
| 2 components of bonds | principal; periodic interest |
| Face value or par value | denomination of bond, principal value due @ maturity |
| Contractual or stated interest rate | rate of interest company pays on principal amount to bondholders |
| Maturity date | date principal will be paid to bondholders |
| Bond Characteristics 1 | May be secured by collateral or unsecured; May be convertible to common stock |
| Bond Characteristics 2 | May be callable; May be term bonds or serial |
| Issuance of bonds vs. stock 1 | Bond int.=tax deductible; Div. on C/S aren't |
| Issuance of bonds vs. stock 2 | EPS higher w/bonds vs. stock b/c fewer shares issued; NI lower due to int. exp. |
