Class2-CurrLiab1 - M351 Notes, Class 2: Current...

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M351 Notes, Class 2: Current Liabilities, pp. 617-631 Today’s topics What is a liability? What is a current liability? What are examples of current liabilities? When do these liabilities increase/decrease? A. Liability definition: probable future outflow arising from a present obligation resulting from past transactions Notice that the definition of a liability involves the present, the future, and the past. It is a present responsibility, to sacrifice assets in the future, caused by a transaction or other event that already has happened. 1. Current Liability definition: a liability that will likely require an outflow within the longer of one year or one operating cycle and the outflow will probably use existing resources (Current Assets). 2. A list of Current Liabilities Accounts Payable Notes Payable Current maturities of LTD Short-term obligations expected to be refinanced Dividends Payable Customer Advances/Deposits Unearned Revenue Sales Tax Payable Income Taxes Payable Employee-Related liabilities Witholding taxes payable FICA taxes payable Union Dues payable Federal Unemployment Tax Payable 1
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State Unemployment Tax Payable Compensated Absences (e.g., vacation wages payable) Bonus agreements (e.g., pofit-sharing bonus payable) 3. Interest on a Current (short term) Note Payable with a maturity of one year
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This note was uploaded on 12/04/2009 for the course MGMT 351 taught by Professor Staff during the Spring '08 term at Purdue University-West Lafayette.

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Class2-CurrLiab1 - M351 Notes, Class 2: Current...

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