Liabilities - Liabilities are obligations For U.S GAAP...

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Liabilities are obligations. For U.S. GAAP accounting, liabilities are broadly defined as being 1. probable future sacrifices of economic benefits 2. that arise from present obligations 3. that result from past transactions Note while most liabilities involve known amounts of obligations to be paid in cash on specific dates, the definition is open to many other obligations where amounts and timing are not certain. Current vs. long-term liabilities Current liabilities are often loosely defined as liabilities that must be paid within one year. For firms having w:operating cycles longer than one year, current liabilities are defined as those which must be paid during that longer period. The more correct definition, however, is that current liabilities are liabilities that will by settled by current assets or by the creation of other current liabilities. Typical short term liabilities include accounts payable, short-term notes payable, commercial paper, and trade notes payable. For example, consider what happens in the last year of a long term note, when the full face
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This note was uploaded on 04/03/2012 for the course ACCT 325 taught by Professor Warren during the Spring '08 term at Rutgers.

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Liabilities - Liabilities are obligations For U.S GAAP...

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