Notes Ch 13

Notes Ch 13 - Jorge Rossello Busi 100 Chapter 13 Notes I....

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Jorge Rossello Busi 100 Chapter 13 Notes I. Basic Reporting of Liabilities a. Liabilities: Future sacrifices of economic benefits arising from present obligations, the debts of an organization b. Current Liabilities: Debts that will be satisfied within one year from the date of a balance sheet. c. Non-Current Liab: Debts that won’t “ “. d. Current Ratio: Formula measuring an organization’s liquidity (ability to pay debts as they come due). Current Ratio = Current Assets / Current Liabilities II. Reporting Current Liabilities Such as Gift Cards a. Accrued Liabilities: Liabilities that grow gradually because of the passage of time; common examples are salaries and interest. b. Gift Card Liabilities: Obligation arising when a business accepts cash in exchange for a card that can be redeemed for a specified amount of assets or services. i. Sale of Gift Card: Debit Cash; Credit Unearned Revenue ii. Redemption of Gift Card: Debit UR; Credit Revenue AND Debit COGS; Credit Inventory III. Accounting For Contingencies
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Notes Ch 13 - Jorge Rossello Busi 100 Chapter 13 Notes I....

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