Capital Lease
A long-term lease that essentially functions as a purchase. The lessee assumes ownership-like risks and benefits, and the asset is recorded on the balance sheet, along with a corresponding liability. Capital leases differ from operating leases, which are treated more like rental agreements.
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Cash Equivalent
Short-term, highly liquid investments that can be quickly converted into a known amount of cash typically within three months. Examples…
Contingent Liability
Contingent liability is a potential obligation that may arise depending on the outcome of a future event, like a lawsuit…
Closing Entries
Journal entries made at the end of an accounting period to reset temporary accounts like revenue and expenses to zero.…
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