ACCT20100 Lecture Notes - Lecture 20: Effective Interest Rate, Accounts Payable, Cash Cash
Document Summary
The acquisition of assets can be financed from: Creditors can force bankruptcy if don"t pay interest on time. Recorded at their current cash equivalent (the amount a creditor would accept to settle the liability immediately) Accounts payable (trade accounts payable)- obligations to pay for goods and services used in the basic operating activities in the business. Accrued liabilities (accrued expenses)- obligations related to expenses that have been incurred but have not been paid at the end of the accounting period. Notes payable- obligations due supported by a formal written contract. Deferred revenues (unearned revenues)- obligations arising when cash is received prior to the related revenue being earned. Gross pay minus social security tax, medicare tax, federal income tax, Company withholds it to pay for you but if they don"t, you are still liable for it. A note payable specifies the interest rate associated with borrowing. Interest = principal x interest rate x time.
