Ch 9

Question 0

Accounts payable

Answer 0

Amounts owed for inventory, goods or services

Acquired in normal course of business

Question 1

Current liability AKA short term liability

Answer 1

Accts that will be satisfied within one year

Or current operating cycle

Question 2

Notes payable

Answer 2

Amounts owed that are represented by a formal contract

Question 3

Discount on notes payable, journal entry?

Answer 3

Contra liability that represents interest deducted
from loan in advance

Interest expense. Xxx
Discount on notes payable. Xxx

Question 4

Current maturities of long term debt AKA Longterm debt current portion, journal entry?

Answer 4

Portion of Longterm liability that will be paid within 1 year

Longterm liability. Xxx
Current portion of liability. Xxx

Question 5

Accrued liability

Answer 5

Liability has been incurred but not yet paid

Ex. Wages payable, interest payable

Question 6

Decrease in accounts payable results in?

Answer 6

Decrease operating activities

Question 7

Increase in current liability results in?

Answer 7

Increase in operating activities

Question 8

Contingent liability AKA contingent loss

Answer 8

Existing condition in which the outcome is not known
But depends on a future event

Recorded as if probable

Question 9

Estimated liability

Answer 9

Contingent liability that is accrued and reflected on balance sheet

Ex. Warranties for estimating defective products, some lawsuits