Chapter 9 Outline.docx - Chapter 9 Outline CURRENT...

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Chapter 9 Outline CURRENT LIABILITIES AND LONG-TERM DEBT 1) What Are the Differences Among Known, Estimated, and Contingent Liabilities? a. Known liabilities i. Known obligations of known amounts ii. Accounts payable, notes payable, unearned revs, accrued liabilities b. Estimated liabilities i. Known obligation of an unknown amount ii. Estimated warranties payable (ex: Apple) c. Contingent liabilities i. Arises because of past event but is dependent on the outcome of a future event 2) How Do You Account for Current Liabilities of a Known Amount? a. Accounts payable i. Purchasing something on account. Debit asset, credit accounts payable b. Notes payable i. Notes not classified as current are considered long-term debts c. Sales tax payable i. Sales tax must be remitted to the state on a periodic basis (w/in a yr) d. Accrued expenses i. Interest, salaries/wages, payroll taxes, income taxes ii. Debit related expense account, credit liability account e. Unearned revenues (deferred revenues) i.
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