{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

What are current liabilities liabilities that a firm

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

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...
View Full Document

{[ snackBarMessage ]}

Ask a homework question - tutors are online