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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
✓ 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
✓ 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.
- Spring '08