Chapter 7

Line of credit: a method of short-term borrowing and it allows a company to access credit on an as- needed basis up to a maximum amount set by the lender. Accounts payable: Amounts owed for products or services purchased on credit Accrued liabilities (Accrued expenses): results from an expense the business have incurred but has not yet been billed for or paid. Salaries and Wages Payable is the liability for salaries, wages, and related payroll expenses not yet paid at the end of the period. Services used but not paid for. Deferred revenue: have received cash but haven't provided services Short-term notes payable: notes payable paid within one year Sales tax payable: to the government levying the tax. Canada has three types of sales taxes: Goods and services tax (GST) is a value-added tax levied by the federal government. At the time of writing, the tax is 5%. It applies to most goods and services. Provincial or regional sales tax (PST) is a retail tax applied to goods and services purchased by individuals or businesses for their own use, not for resale, with the rates varying by province or region. At the time of writing, Alberta, the Northwest Territories, Nunavut, and Yukon do not levy a provincial or regional sales tax. Harmonized sales tax (HST), which combines PST and GST, is also a value-added tax. Prince Edward Island, New Brunswick, Newfoundland and Labrador, Nova Scotia, and Ontario, together with the federal government, levy an HST. Payroll: also called employee compensation , is a major expense for most companies
Equations: Net pay = gross salary - CPP - EI - income tax Employer EI contribution = employee EI contribution x 1.4 INPUT tax is also called tax recoverable OUTPUT tax is called tax payable Find the difference between both in order to pay the government, OUTPUT-INPUT Course: individual tax Warranty: Selling warranty: Putting money aside Paying
Chapter 7 long term liabilities: Face value (at end) Coupon, nominal, contractual, bond, face, stated and printed
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