Define current liability, Financial Accounting

Assignment Help:

The following items represent liabilities on a firm's balance sheet:
a. An amount of money owed to a supplier based on the terms 2/20, n/40, for which no note
was executed.
b. An amount of money owed to a creditor on a note due April 30, 2013.
c. An amount of money owed to a creditor on a note due August 15, 2014.
d. An amount of money owed to employees for work performed during the last week in December.
e. An amount of money owed to a bank for the use of borrowed funds due on March 1, 2013.
f. An amount of money owed to a creditor as an annual installment payment on a ten-year
note.
g. An amount of money owed to the federal government based on the company's annual
income.

Required
1. For each item, state whether it should be classified as a current liability on the December 31,
2012, balance sheet. Assume that the operating cycle is shorter than one year. If the item
should not be classified as a current liability, indicate where on the balance sheet it should be
presented.
2. For each item identified as a current liability in part (1), state the account title that is normally used to report the item on the balance sheet.
3. Why would an investor or a creditor be interested in whether an item is a current or a longterm liabilities?

 


Related Discussions:- Define current liability

Determine estimated cost, XYZ Company is a large manufacturer of auto parts...

XYZ Company is a large manufacturer of auto parts for the auto manufacturers and parts distributors. XYZ has plants throughout the world, but most are located in North America. XYZ

Expense recognition, Purchases office supplies on account costing $12,600 d...

Purchases office supplies on account costing $12,600 during July. It pays $5,500 for these purchases during July and the remainder during August. Office supplies on hand on July 1

Finacial stament, Ask question #Minimum 10010 qestions words accepted#

Ask question #Minimum 10010 qestions words accepted#

The rectification entries, Show the rectification entries for the following...

Show the rectification entries for the following:                                        (10 marks) a.    The Sales account is undercast by Rs.15,000 b.    Goods returned by

Realisation of assets-liquidation of companies, Realisation of assets 1...

Realisation of assets 1. Divisible property : The ownership of the company's property does not vest in the liquidator (unless the court makes a vesting order: s.240); but

Calculation of the actuarial gain and losses, Calculation of the actuarial ...

Calculation of the actuarial gain/losses in year to 31 December 2010 FV of plan assets PV of plan liabilities $000

Troubled debt restructuring, Troubled Debt Restructuring - Agreement betwee...

Troubled Debt Restructuring - Agreement between CREDITOR and DEBTOR which amends the terms of a DEBT which has little chance of being paid in accordance with its contractual terms.

Partnership, in the absence of no agreement in partnership discuss and expl...

in the absence of no agreement in partnership discuss and explain the provision of partnership act

Retained earnings for plant expansion, Foley Corporation has the following ...

Foley Corporation has the following capital structure at the beginning of the year: 6% Preferred stock, $50 par value, 20,000 shares authorized, 6,000 shares issued and outstanding

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd