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 the accounting aspects of business, Determine the accounting aspe...

Determine the accounting aspects of business Accounting scandals can have a profound effect on all those connected with business. Enron scandal, for instance, ultimately led t

Homework, i have some homework that need help

i have some homework that need help

Lack of assets available to offer as collateral or security, Q. Lack of ass...

Q. Lack of assets available to offer as collateral or security? If SMEs wish to access bank finance for instance, then banks will wish to address the information problem referr

Accounting date-trusts accounts-trusts laws and accounts, Accounting Date ...

Accounting Date In determining the accounting date of the trust, the trustees will consider the following: Date of death (accounts to anniversary of death); Fiscal y

Preliminary expenses through the income statement, Alexandria Co. Ltd has a...

Alexandria Co. Ltd has an authorized capital of Rs 25,000,000 divided into 250,000 equity shares of Rs 100 each. 100,000 shares were issued to public and Rs 80 per share were paid.

Portfolio''s new beta., Assume you hold a diversified portfolio having of a...

Assume you hold a diversified portfolio having of a $7,500 investment in every of 20 different common stocks. The portfolio's beta is 2.15. Now, assume you sell one of the stocks w

Indian company, content of financial statement with refrence to indian comp...

content of financial statement with refrence to indian company

Integer programming, Proposals A, B, C, D, E, and F are being considered wi...

Proposals A, B, C, D, E, and F are being considered with money flows over 10 years. Proposal (A and D) are mutually exclusive, (C and F) are also mutually exclusive, and pr

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