SPONTANEOUS LIABILITIES Definition

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SPONTANEOUS LIABILITIES are obligations that are realized automatically, in the course of operating a company day-to-day, when a company buys goods and services on credit.

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ACTUARIAL METHOD means the method of allocating payments made on a debt between the amount financed and the finance or other charges where the payment is applied first to the accumulated finance or other charges and any remainder is subtracted from, or any deficiency is added to the unpaid balance of the amount financed.

CUMULATIVE, in securities, is where a preferred stock dividend is cumulative if the dividend accrues when payments are not made as scheduled.

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