Key Liabilities Flashcards
Revolver
Similar to a credit card for a company, borrows money as needed and must repay it quickly
Accounts payable
Company has recorded these as expenses on income statement, but not yet paid out in cash yet
- used for one time items with specific invoices like payment for legal services
Accrued expenses
Company has recorded these as expenses on income statement, but hasn’t paid out yet
- used for recurring monthly items without invoices like employee wages
Deferred revenue
Company has collected cash in advance from customers for product yet to be delivered , will recognise as real revenue over time
Deferred tax liability
Company has paid lower taxes than what it really owes, needs to make up by paying additional taxes to gov in the future
Long term debt
Similar to a mortgage or a car loan, debt which is due and must be repaid in over a year’s time
Current vs Non-current
Current - needs to settle within a year
