ADMN 2021H Chapter Notes - Chapter 10: Sales Taxes In Canada, Floating Interest Rate, Accounts Payable

• School: Trent University
• Department: Business Administration
• Course: ADMN 2021H
• Professor: Richard

Document Summary

Liability present obligations that results from past transactions. Obligations must be paid sometime in the future by transfer of assets or services. Current liability a debt that will be paid within one year from the date on the statement of financial position or within one operating cycle. Paid from existing current assets or through the creation of other current liabilities. Non-current liability (long-term liabilities) debts that do not meet both criteria mentioned above. Types of current liabilities: indebtedness arising from operating lines of credit, accounts payable, accrued liabilities such as taxes, salaries, and interest, unearned revenue, notes and loans payable, current portion of non-current debt. Current liabilities are (cid:498)certain(cid:499) if they have a known payee, due date, and amount payable. Interest is charged using a floating interest rate. Floating interest rate changes as market interest rates change and is usually based on the prime borrowing rate possible default on the loan by the borrower.