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Warren_23e__AISE_IM_Ch11 - chapter 11 Current Liabilities...

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chapter 11 Current Liabilities and Payroll ______________________________________________ OPENING COMMENTS Chapter 11 covers a variety of obligations included in the Current Liabilities section of the balance sheet: notes payable, contingent liabilities, payroll, and employee fringe benefits. The quick ratio is introduced in the Financial Analysis and Interpretations portion of this chapter as a tool to analyze the level of current liabilities held by a business. After studying the chapter, your students should be able to: 1. Describe and illustrate current liabilities related to accounts payable, current portion of long-term debt, and notes payable. 2. Determine employer liabilities for payroll, including liabilities arising from employee earnings and deductions from earnings. 3. Describe payroll accounting systems that use a payroll register, employee earnings record, and a general journal. 4. Journalize entries for employee fringe benefits, including vacation pay and pensions. 5. Describe the accounting treatment for contingent liabilities and journalize entries for product warranties. STUDENT FAQS Why does it make a difference if liabilities are divided properly between current and long-term liabilities? What is the current operating cycle again, and why can’t we just always use one year? Why is correct payroll calculation so important? 175 This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold, copied, or distributed without the prior consent of the publisher.
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176 Chapter 11 Current Liabilities and Payroll This edition is intended for use outside of the U.S. only, with content that may be different from the U.S. Edition. This may not be resold, copied, or distributed without the prior consent of the publisher. Why can’t vacation pay and regular pay be combined? Is the cost of product warranties going up or down now on a company’s books? Are pension benefits going up or down at this time in the economy? Why do we have to record product warranty liability when only a small percentage of goods are ever repaired or replaced? Can’t a company record a large product warranty liability one year in an effort to reduce income and then not record any next year to increase income? How can a company record pension liabilities when it doesn’t know how much an employee will receive or how long an employee will draw the pension? Why can’t a company record the pension as an expense when paid? IN-CLASS AND HOMEWORK ASSIGNMENT CHART Number Objective Description Difficulty Time AACSB AICPA SS GL EO11-1 11-1 Easy 5 min Analytic FN-Measurement EO11-2 11-1 Easy 5 min Analytic FN-Measurement EO11-3 11-2 Easy 5 min Analytic FN-Measurement EO11-4 11-2 Easy 5 min Analytic FN-Measurement EO11-5 11-2 Easy 5 min Analytic FN-Measurement EO11-6 11-2 Easy 5 min Analytic FN-Measurement EO11-7 11-3 Easy 5 min Analytic FN-Measurement EO11-8 11-3 Easy
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  • Spring '10
  • Prof.Steve
  • FN-Measurement FN-Measurement FN-Measurement, Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic AICPA, Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic Analytic

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Warren_23e__AISE_IM_Ch11 - chapter 11 Current Liabilities...

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