Ch 8

A(n) ____ payable results from an agreement with a supplier to pay within 30 to 60 days, whereas a(n) _____ payable is a signed contract that promises to pay a specific amount with interest at a specific maturity date.

Account, Note

What is contingency?

An uncertain situation in a company that can result in a gain or loss

What is an operating cycle?

Average time it takes to turn materials or services into Cash

Identify characteristics of notes payable that are not common to accounts payable

Based on promissory note Interest bearing

What is the difference between long-term and current liabilities?

Current = Payed off in 1 year Long-term = Payed off over 1 year

An end-of-period adjusting entry that debits Deferred Revenue most likely will credit a(n) ______ account.

Revenue

What is the current portion of long-term debt?

the amount that will be paid within the next year

What is a line of credit?

the maximum amount of money a creditor will allow a credit user to borrow