Commercial paper "Unsecured loans sold to the public, usually through professionally managed investment firms, as a means of borrowing short-term funds."

Commitment A legal obligation that does not meet the technical requirements for recognition as a liability.

Compound interest "The interest cost for two or more periods if we assume that after each period, the interest of that period is added to the amount on which interest is computed in future periods."

Contingent liability A potential liability that arises from a past transaction and is dependent on a future event.

Current liabilities "Debts and obligations expected to be satisfied within one year or within the normal operating cycle, whichever is longer."






Definitely determinable liabilities Current liabilities that are set by contract or statute and that can be measured exactly.






Estimated liabilities Definite debts or obligations whose exact amounts cannot be known until a later date.






Future value The amount an investment will be worth at a future date if invested at compound interest.






Interest The cost associated with the use of money for a specific period of time.






Liabilities Legal obligations for the future payment of assets or the future performance of services that result from past transactions.

Line of credit An arrangement with a bank that allows a company to borrow funds as needed.

Long-term liabilities Debts or obligations due beyond one year or beyond the normal operating cycle.






Ordinary annuity "A series of equal payments made at the end of equal intervals of time, with compound interest on the payments."






Payables turnover "The number of times, on average, that accounts payable are paid in an accounting period; cost of goods sold plus (or minus) change in merchandise inventory divided by average accounts payable."

Present value The amount that must be invested now at a given rate of interest to produce a given future value.






Salaries Compensation of employees who are paid at a monthly or yearly rate.

Simple interest The interest cost for one or more periods if we assume that the amount on which the interest is computed stays the same from period to period.






Time value of money The effects of the passage of time on holding or not holding money.






Unearned revenues Revenues received in advance for goods or services that will not be delivered during the current accounting period.






Wages Payment for services of employees at an hourly rate.