AMIS2200H - Liabilities (Ch 9)

Flashcards covering key vocabulary related to Liabilities in Financial Accounting.

Liability

An existing obligation arising from past transactions that requires future payment of assets or performance of services.

Current Liabilities

Obligations due within one year, such as accounts payable and accrued payables.

Long-term Liabilities

Obligations due in more than one year, including long-term notes payable and bonds payable.

Present Value (PV)

The value today of some known amount in the future, necessary to achieve a future amount at a specified interest rate.

Future Value (FV)

The future value of a known amount today at an assumed rate of growth.

Annuity

A repeating cash flow at even intervals, such as equal payments made over multiple periods.

Compounding Interest

Interest calculated on the initial principal and also on the accumulated interest from previous periods.

Discount Rate

The interest rate used to determine the present value of future cash flows.

Interest Payable

A liability representing interest accrued but not yet paid.

Lease

A contractual agreement that gives a lessee the right to use property owned by a lessor for a specified period in exchange for periodic payments.