Current Liabilities and Contingencies

A set of flashcards covering key vocabulary related to current liabilities and contingencies in financial accounting.

Current Liabilities

Obligations that are expected to be settled within one year from the balance sheet date.

Long-Term Liabilities

Obligations that are due beyond one year from the balance sheet date.

Accounts Payable

Amounts owed to suppliers for merchandise or services, typically considered a current liability.

Deferred Revenue

A liability account used to record cash received in advance of providing goods or services.

Notes Payable

A written promise to pay a specified amount of money at a future date, usually including interest.

Contingent Liability

An existing uncertain situation that might result in a loss depending on the outcome of a future event.

Liquidity

The ability of a company to meet its short-term obligations with its current assets.

Current Ratio

A measure of liquidity calculated by dividing current assets by current liabilities.

Sales Tax Payable

Sales taxes collected from customers that are owed to the government.

Interest Expense

The cost incurred by an entity for borrowed funds, typically recorded in the period in which it is incurred.