acc 302 exam 1 acc 302 exam 1
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1. current liability A probable future sacrifices of economic benefits arising
from present obligations of a particular entity to transfer
assets or provide services to other entities in the future as
a result of past transactions or events according to FASB
2. characteristics of a current liabil- 1. It is a PRESENT obligation that entails settlement by
ity probable future transfer or use of cash, goods, or services
2.
It is an UNAVOIDABLE obligation
3. The transaction or other event creating the obligation
HAS ALREADY OCCURED
3. current liability Obligations whose liquidation is reasonably expected to
require use of existing resources properly classified as cur-
rent assets, or the creation of other current liabilities
4. Operating Cycle Period of time elapsing between the acquisition of goods
and services involved from sales and subsequent collec-
tions
5. Operating Cycle what establishments have several operating cycles within 1
year
6. 1. Accounts payable
2. Notes payable
3. Dividends payable
4. Customer advances and deposits
5. Unearned revenues
6. Sales taxes payable
7. Income taxes payable
8. Employee-related liabilities
9. Current maturities of long-term debt
1
, acc 302 exam 1 acc 302 exam 1
Study online at https://quizlet.com/_8tzn58
7. short term obligations Debts scheduled to mature within one year after the date
of a company's balance sheet or within its operating cycle
(whichever is longer) with some being expected to be
refinances on a long term basis
8. short term debt FASB concluded that applying a principle based on the
terms and conditions of a contract (contractual approach)
is appropriate and a company can classify (blank) to be
refinances as noncurrent
9. two criteria of a short term liabil- 1. the liability is contractually due to be settled more than
ity to be refinances (must meet one year or operating cycle after the balance sheet date
one or both) 2. the entity has a contractual right to defer the settlement
of the liability for at least one year after the balance sheet
date
10. true true or false:
when refinancing even if you learn about it BEFORE the
statements are issued, if NO VALID CONTRACT OR DEFERRAL
RIGHT is in place then it must be current
11. contingency An existing condition, situation, or set of circumstances
involving uncertainty as to possible gain or loss to an en-
terprise that will ultimately be resolved when one or more
future events occur or fail to occur
12. gain contingency Claims or rights to receive assets or have a liability reduced
whose existence is uncertain but which may be valid even-
tually
13. examples of gain contingency 1. Possible receipts of monies from gifts, donations, asset
sales, and so on
2. Possible refunds from the government in tax disputes
2
Study online at https://quizlet.com/_8tzn58
1. current liability A probable future sacrifices of economic benefits arising
from present obligations of a particular entity to transfer
assets or provide services to other entities in the future as
a result of past transactions or events according to FASB
2. characteristics of a current liabil- 1. It is a PRESENT obligation that entails settlement by
ity probable future transfer or use of cash, goods, or services
2.
It is an UNAVOIDABLE obligation
3. The transaction or other event creating the obligation
HAS ALREADY OCCURED
3. current liability Obligations whose liquidation is reasonably expected to
require use of existing resources properly classified as cur-
rent assets, or the creation of other current liabilities
4. Operating Cycle Period of time elapsing between the acquisition of goods
and services involved from sales and subsequent collec-
tions
5. Operating Cycle what establishments have several operating cycles within 1
year
6. 1. Accounts payable
2. Notes payable
3. Dividends payable
4. Customer advances and deposits
5. Unearned revenues
6. Sales taxes payable
7. Income taxes payable
8. Employee-related liabilities
9. Current maturities of long-term debt
1
, acc 302 exam 1 acc 302 exam 1
Study online at https://quizlet.com/_8tzn58
7. short term obligations Debts scheduled to mature within one year after the date
of a company's balance sheet or within its operating cycle
(whichever is longer) with some being expected to be
refinances on a long term basis
8. short term debt FASB concluded that applying a principle based on the
terms and conditions of a contract (contractual approach)
is appropriate and a company can classify (blank) to be
refinances as noncurrent
9. two criteria of a short term liabil- 1. the liability is contractually due to be settled more than
ity to be refinances (must meet one year or operating cycle after the balance sheet date
one or both) 2. the entity has a contractual right to defer the settlement
of the liability for at least one year after the balance sheet
date
10. true true or false:
when refinancing even if you learn about it BEFORE the
statements are issued, if NO VALID CONTRACT OR DEFERRAL
RIGHT is in place then it must be current
11. contingency An existing condition, situation, or set of circumstances
involving uncertainty as to possible gain or loss to an en-
terprise that will ultimately be resolved when one or more
future events occur or fail to occur
12. gain contingency Claims or rights to receive assets or have a liability reduced
whose existence is uncertain but which may be valid even-
tually
13. examples of gain contingency 1. Possible receipts of monies from gifts, donations, asset
sales, and so on
2. Possible refunds from the government in tax disputes
2
