#1 Handout for Bus321-Intermediate Accounting II
Professor: Yasheng Chen
Notes for BUS321 Class 1: Current Liabilities and Contingencies
Learning objectives:
1.
2.
3.
4.
Understand the definition of LIABILITY and CURRENT LIABILITY
Remember journal entries to record common current liabilities
Remember journal entries to record estimated liabilities
Understand PE GAAP and IFRSs disclosure requirements for contingent
liabilities.
5. Evaluate a firms short-term liquidity by analyzing current its liabilities.
Key learning points:
1 Definitions of Liabilities, financial liabilities, current liabilities, estimated liability,
and contingencies
2. Three essential characteristics of a liability
i.
ii.
iii.
3. Reclassification of some long-term and short-term debt
a. Current Maturities of Long-Term Debt
b. Short-Term Debt Expected to be Refinanced
4. Principles to record estimated liabilities
a.
b.
5. Conditions to accrue a contingent liability
a.
b.
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