ch 13 Current liablities

ch 13 Current liablities - SHORT-TERM MONETARY ITEMS:...

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1 SHORT-TERM MONETARY ITEMS: Current Liabilities Long-term L. Liabilities: (by the maturity date) Determinable C. L. Current L.: (by the certainty of existence. .) Contingent L. A. Liabilities. 1. FASB definition: probable future sacrifices of economic benefits arising from present obligations as a result of past transactions or events. B. Current liabilities. 1. Definition: obligations whose liquidation is reasonably expected to require the use of current assets or the creation of other current liabilities, - while current assets are cash or other assets that can be reasonably expected to be converted to cash, sold, or consumed in operations within a single operation cycle or one year whichever is longer. 2. Owing to their short term nature, the time value of money is ignored and current liabilities ate stated as full maturity value. C. Determinable Current Liabilities.
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2 1. Such liabilities that can be measured precisely and the amount and timing of cash outflows are reasonably certain. 2. Account payable. purchase xxx account payable xxx 3. Note payable. 1) Trade note : a promissory note payable to suppliers of goods, services, and equipment. a) when issue, inventory xxx note payable xxx(the face value of the note) b) when pay interest, interest expense xxx cash xxx 2) Short-term loan note: a promissory note to banks or loan companies. a) Interest bearing note: the same as trade note. b) Noninterest bearing note: when issue, cash xxx discount on note payable xxx note payable xxx ** Discount on note payable is generally amortized on a straight-line basis. Thus, as time goes, interest expense xxx discount on note payable xxx 4. Current maturity of long-term debts: the portion of long- term debt that matures in the next year is reported as a current liability, unless - it is to be refinanced by a new debt issue or - by conversion into stock, or - it is to be retired by assets accumulated for this
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3 purpose that have not been shown as current assets.(e.g. sink bond fund)
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This note was uploaded on 02/23/2010 for the course ACCT 34131 taught by Professor Escobar during the Winter '10 term at CSU San Bernardino.

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ch 13 Current liablities - SHORT-TERM MONETARY ITEMS:...

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