Kieso, Weygandt, Warfield, Young, Wiecek Intermediate Accounting, Eighth Canadian Edition 13-3 Bank Indebtedness and Credit Facilities 7. The cash position of a company is closely related to its bank indebtedness for current operating purposes and its associated line-of-credit or revolving debtarrangements. Instead of having to negotiate a new loan every time the company needs funds, it generally enters into an agreement with its bank to make multiple borrowings up to a negotiated limit. The company draws on the fund as needed and is normally required to make pre-negotiated repayments. Accounts Payable 8. Accounts payablerepresent obligations owed to others for goods, supplies, and services purchased on open account. These obligations, commonly known as trade accounts payable, should be recorded to coincide with the receipt of the goods or at the time title passes to the purchaser. Attention must be paid to transactions occurring near the end of
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