Intro to Accounting Session 17.pptx - Introduction to Accounting 18 October 2016 Session 17 Agenda \u2022 Attendance \u2022 Quiz results \u2022 Module 1

Intro to Accounting Session 17.pptx - Introduction to...

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Introduction to Accounting 18 October 2016 Session 17
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Agenda Attendance Quiz results Module 1: Liabilities (Not in the study materials) Module 2: Account Payable (Not in the study materials) 25 October Quiz: Liabilities & Account Payable
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Objectives Understand the definition of liabilities Understand how to record account payable and accrued expense in the book Understand invoice credit terms
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The Accounting Equation Chapter 1 When a business is set up by its owner and is funded by vendors and lenders, the equation looks like: Equity Liabilit ies Assets
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Liabilities Amounts owned to vendors and lenders. Amounts owned by a business which has a legal binding obligation to another business, or entity. Liabilities are incurred in order to fund the ongoing activities of a business. Liabilities often have the word "payable" in the account title. Examples of liabilities are accounts payable, or wages payable. Liabilities also include amounts received in advance for a future sale or for a future service to be performed. Examples of unearned revenues.
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Liabilities Current liabilities: Liabilities expected to be settled within one year are classified as current liabilities on the balance sheet. Examples of account payable, wages payable, current term portion of loan payable and etc. Non-current, or long-term liabilities: All other liabilities are classified as long-term liabilities. Example of customer deposits, long term portion of loan payable.
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Liabilities When a company orders and receives goods (or services) in advance of paying for them, we say that the company is purchasing the goods on account or
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