Straight line double declining balance or an

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straight-line, double declining balance, or an alternative method
Depreciative cost also known as net book value is calculated by taking the asset total purchase price minus the accumulated depreciation at the time. Week 4 Discussion 1 What is a current liability? From the perspective of a user of financial statements, why do you believe current liabilities are separated from long-term liabilities? Based on your current experience as well as any additional research you may have done provide two examples of situations where businesses collect monies from customers and employees and reports these amounts as a current liability. Define Current Liability “Current liabilities are obligations that must be settled within one year or the operating cycle, whichever is longer. Current liabilities are usually satisfied by transferring a current asset. Accounts payable, salaries payable, utilities payable, taxes payable, and short-term loans are some examples (Wainwright, 2012). Some other current liabilities are unearned revenue, accrued liabilities, current portion of a long-term loan. Why Separate Liabilities The most obvious reason that current liabilities and long-term liabilities are separated is simply because of the length of the accounting cycle. A current liabilities ends within the accounting period, and a long-term liability takes several years to complete or beyond the normal operating cycle. Usually, a current liability is done with informal credit terms or working relationship and doesn't incur interest. Long-term liabilities is a formal written agreement that will have incurred interest during the duration of the debt. “Such notes arise not only with purchases of goods and services on an account but bank loans, equipment purchases, and simply cash loans” (Wainwright, 2012). These types of liabilities typically have terms well beyond one normal operating cycle. Having those liabilities separated makes it easier on your financial statement so that you will know which liabilities go beyond a business’s normal accounting period. Examples A typical situation I think for a current liability is when we travel. Most consumers plan a trip well in advance of the time they take a family vacation. So for a family reunion we rented a beach house, and

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