COMMERCE 1AA3 Study Guide - Final Guide: Effective Interest Rate, Contingent Liability, Operating Lease

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 1AA3
• Professor: Aadil Merali Juma

Document Summary

Current liability liabilities: usually a year long. Interest-bearing notes: the interest rate is stated explicitly on the note, for long-term notes, Non-interest- bearing notes: although interest rate is not stated explicitly on the note, the note still earns interest. Sales taxes payable: gst-good and service, pst- provincial/regional sales tax, hst harmonized sales tax. Accrued liabilities: results from expenses incurred but not yet paid. Payroll: the major expense of most companies, many different forms. Warranty expense is estimated in the year product is sold. Inventory or cash xxxx: types of estimated liabilities. Premiums, coupons, and air miles: contingent liabilities. A contingency is an existing condition or situation involving uncertainty as possible gain (gain contingency) or loss (loss contingency) that will ultimately be resolved when one or more future events occur or fail to occur. It involve situations of possible loss at the balance sheet date. A liability incurred as a result of a loss contingency is a contingent liability.