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

Explain the term reporting interval - management accounting, Explain the te...

Explain the term Reporting interval - Management accounting For most businesses, financial accounting reports are produced on an annual basis, though some large businesses prod

Case study, I need help with a mini accounting project. Here is a link to t...

I need help with a mini accounting project. Here is a link to the questions I need to be answered. Read the questions and instructions and if you think you can complete the case wi

Determine pension expense for the year ended december 31, Part A: The follo...

Part A: The following information relates to Company A's defined benefit pension plan during the current fiscal year: Plan assets (beginning of the year) $400 (all number are in $m

Calculate the pv and npv, Question 1 Suppose you take out a loan of $10...

Question 1 Suppose you take out a loan of $10,000, repayable by five equal annual instalments. The interest rate is 10% per year. (a) How much do you need to repay per year

What is the monthly rate - annual rate, Suppose that the annual rate of int...

Suppose that the annual rate of interest is 4%. (a) What is the monthly rate? (b) Consider a 3-year lease on a car that is worth $20,000 today. The first payment on the lease

Bonds, How to prepare a bond amortization sheet

How to prepare a bond amortization sheet

Nikki., Trying to calculate earnings per share. Is net income the same as ...

Trying to calculate earnings per share. Is net income the same as earnings before interest and taxes?

One more interest payment, 1. What will be the value of every of these bond...

1. What will be the value of every of these bonds when the going rate of interest is 4%? Suppose that there is only one more interest payment to be made on Bond S. Round your answe

Sales, what is recorded sales on account of 3,280

what is recorded sales on account of 3,280

Earn profit or incurred loss , Assure  you have just  started a Mobile sto...

Assure  you have just  started a Mobile store. You sell mobile sets and  currencies of Airtel, Vodaphone, Reliance and BSNL.  Take five transactions  and prepare a position stateme

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