Current nonoperating liabilities short term interest

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Current nonoperating liabilities Short-term interest-bearing debt Short-term bank borrowings and notes expected to mature in whole or in part during the upcoming year; this item can include any accrued interest payable. Current maturities of long-term debt Long-term borrowings that are scheduled to mature in whole or in part during the upcoming year; this current portion of long-term debt includes maturing principal payments only. Any unpaid interest is usually included in the prior item. remainder of this section describes, analyzes and interprets current operating liabilities fol- red by a discussion of current nonoperating liabilities. ccounts Payable - ounts payable arise from the purchase of goods and services from others. Accounts payable normally non-interest-bearing and are, thus, an inexpensive financing source. Verizon does - break out accounts payable on its balance sheet but, instead, reports them with other accruals. L01 Analyze and describe the accounting for current operating liabilities, including accounts payable and accrued liabilities.
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It reports $15,702 million in accounts payable and accrued liabilities in 2010, and $15,223 milli in 2009. The footnotes reveal that accounts payable represent $3,936 million in 2010, and $4,r- million in 2009, or 25% of the total each year. The following financial statement effects template shows the accounting for a typical pur- chase of goods on credit and the ultimate sale of those goods. A series of four connected transac- tions illustrate the revenue and cost cycle. 7-5 Module 7 I Liability Recognition and Nonowner Financing INV 100 AP 100 INV WoT AP r 100 AR 140 Sales 140 AR 140l Sales 140 COGS 100 INV 100 COGS 1Oo'T INV I 100 Cash 140 AA 140 Cash i40T AA r 140 AP 100 Cash 100 AP 100 I Cash 100 Balance Sheet Income Statement T ¥ "'" Net Income Cash Noncash Liabil- Contrib. Earned Transaction Asset, + Assets = ities + Capital + Capital Rev- enues Expen- ses 1. Purchase +100 +100 $100 inven- Inventory = Accounts tory on credit Payable za Sell +140 +140 Inventory Accounts = Retained on credit for Receivable Earnings $140 2b. Record -100 $100 cost -100 _ Retained of inventory Inventory - Earnings sold in 2a = +140 Sales +140 = +100 Cost 01 = GoodsSold -100 3. Collect $140 on +140 -140 accounts Cash Accounts- receivable Receivable - - - --~~::~o~~-~~------------------------------------------------------------.--------------------------------------, t----------------------------------------- ..--------------- accounts payable -100 Cash = -100 = Accounts Payable The financial statement effects template reveals several impacts related to the purchase of g on credit and their ultimate sale. 1. Purchase of inventory is reflected on the balance sheet as an increase in inventory and increase in accounts payable. 2a. Sale of inventory involves two components-revenue and expense. The revenue part refl the increase in sales and the increase in accounts receivable (revenue is recognized wb earned, even though cash is not yet received). 2b. The expense part of the sales transaction reflects the decrease in inventory and the increas in cost of goods sold (COGS). COGS is reported in the same income statement as the rel sale (this expense is recognized because the inventory asset is sold, even though invent related payables may not yet be paid).
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