Contingent Liability
Contingent liability is a potential obligation that may arise depending on the outcome of a future event, like a lawsuit or product warranty claim. It’s disclosed in financial statements if the likelihood is reasonably possible and the amount can be estimated. It’s not recorded as a liability unless probable.
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Capital Lease
A long-term lease that essentially functions as a purchase. The lessee assumes ownership-like risks and benefits, and the asset is…
Cash Equivalent
Short-term, highly liquid investments that can be quickly converted into a known amount of cash typically within three months. Examples…
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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