What are current liabilities liabilities that a firm

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Unformatted text preview: event that happened in the past. • What are current liabilities? - Liabilities that a firm expects to satisfy with current assets. - No prescribed order for listing current liabilities. Current liabilities • Current liabilities ACCRUALS ✓ Some accounts you might see... - Notes payable - Accounts payable - Salaries payable - Salary withholdings (income taxes, social security, medicare, unemployment, etc.) - Unearned (or deferred) revenue - Sales tax payable - Current portion of long-term debt - Warranty payable (a contingent liability) Current liabilities • Notes payable - A loan ✓ Note ✓ Line of credit Open option to borrow from a bank. ✓ Commercial paper - Formal document signed when borrowing from a bank. When one company borrows from another company. Two components ✓ Principle ✓ Interest Current liabilities Hincapie Corporation has a line of credit set up with a bank that allows Hincapie to borrow up to $10,000 at an annual interest rate of 12%. On October 1 Hincapie borrows $5,000. On November 1 Hincapie pays the $5,000 back plus any interest owed. Record the Oct 1 and Nov 1 journal entries for Hincapie. Current liabilities • Salary payable - Wages that em...
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This note was uploaded on 02/17/2014 for the course ACCTG 215 taught by Professor Wells during the Spring '08 term at University of Washington.

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