Kieso_Inter_13e_Ch13

Kieso_Inter_13e_Ch13 - CHAPTER 13 13 CURRENT LIABILITIES...

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Chapter 13-1 C H A P T E R C H A P T E R 13 13 CURRENT LIABILITIES AND CURRENT LIABILITIES AND CONTINGENCIES CONTINGENCIES Intermediate Accounting 13th Edition Kieso, Weygandt, and Warfield
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Chapter 13-2 What is a Liability? What is a Liability? FASB, defines liabilities as: Probable Future Sacrifices of Economic Benefits arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a result of past transactions or events.”
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Chapter 13-3 What is a Current Liability? What is a Current Liability? Current liabilities are “obligations whose liquidation is reasonably expected to require use of existing resources properly classified as current assets, or the creation of other current liabilities.” Typical Current Liabilities: Accounts payable. Notes payable. Current maturities of long-term debt. Short-term obligations expected to be refinanced. Dividends payable. Customer advances and deposits. Unearned revenues. Sales taxes payable. Income taxes payable. Employee-related liabilities. LO 1 Describe the nature, type, and valuation of current liabilities.
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Chapter 13-4 Balances owed to others for goods, supplies, or services purchased on open account. Accounts Payable (trade accounts payable) What is a Current Liability? What is a Current Liability? LO 1 Describe the nature, type, and valuation of current liabilities. Arise because of time lag between receipt of goods or services and the payment for them. The terms of the sale (e.g., 2/10, n/30) state period of extended credit.
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Chapter 13-5 Written promises to pay a certain sum of money on a specified future date. Notes Payable What is a Current Liability? What is a Current Liability? LO 1 Describe the nature, type, and valuation of current liabilities. Arise from purchases, financing, or other transactions. Notes classified as short-term or long-term. Notes may be interest-bearing or zero-interest-bearing.
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Chapter 13-6 Illustration (Interest-Bearing Note): Castle National Bank agrees to lend $100,000 on March 1, 2010, to Landscape Co. if Landscape signs a $100,000, 6 percent, four-month note. Landscape records the cash received on March 1 as follows: What is a Current Liability? What is a Current Liability? LO 1 Describe the nature, type, and valuation of current liabilities. Cash 100,000 Notes Payable 100,000
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13-7 Illustration (Interest-Bearing Note): If Landscape prepares financial statements semiannually, it makes the following adjusting entry to recognize interest expense and interest payable at June 30: What is a Current Liability? What is a Current Liability? LO 1 Describe the nature, type, and valuation of current liabilities. Interest expense
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Kieso_Inter_13e_Ch13 - CHAPTER 13 13 CURRENT LIABILITIES...

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