TAILIEUCHUNG - Lecture Accounting principles – Chapter 10: Current liabilities and payroll

In this chapter students will be able to: Account for determinable or certain current liabilities, account for estimated liabilities, account for contingencies, determine payroll costs and record payroll transactions, prepare the current liabilities section of the balance sheet. | Current Liabilities & Payroll Determinable (certain) current liabilities Operating line of credit and bank overdraft Short-term notes payable Sales and property taxes Current maturities of long-term debt Uncertain liabilities Estimated liabilities Contingencies Payroll Employer and employee payroll costs Recording payroll Financial statement presentation Copyright John Wiley & Sons Canada, Ltd. 2 CHAPTER 10: Current Liabilities and Payroll Account for determinable or certain current liabilities. Account for estimated liabilities. Account for contingencies. Determine payroll costs and record payroll transactions. Prepare the current liabilities section of the balance sheet. Calculate mandatory payroll deductions (Appendix 10A). Copyright John Wiley & Sons Canada, Ltd. 3 Determinable (Certain) Current Liabilities Obligations that are expected to be settled: Within one year of the balance sheet date, or Within normal operating cycle Requires existence of a present obligation Determinable liabilities have known amount, payee, due date Copyright John Wiley & Sons Canada, Ltd. 4 Operating Line of Credit Pre-authorized borrowing Allows the company to borrow up to a preset limit when needed May require collateral (security) Such as current assets, investments, or property, plant and equipment Used on a short-term basis Negative (overdrawn) cash balance is called bank indebtedness, bank overdraft or bank advances Copyright John Wiley & Sons Canada, Ltd. 5 Short-Term Notes Payable Obligations in the form of written promissory notes Usually require the borrower to pay interest Used instead of accounts payable Gives lender proof of obligation in case legal action is needed to collect Issued for varying periods If due within one year of the balance sheet date, classified as current liabilities Copyright John Wiley & Sons Canada, Ltd. 6 Short-Term Notes Payable 2 Interest is recorded in the period the loan is outstanding: At maturity, the face value of the note plus interest .

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• Accounting principles
• Lecture Accounting principles
• Financial reporting
• Current liabilities
• Sales taxes
• Long term debt
• Fundamental accounting principles
• Lecture Fundamental accounting principles
• Accounting information systems
• Fundamental system principles
• Technology based accounting systems
• Accounting information
• Financial accounting
• Managerial accounting
• Managerial cost
• Reporting manufacturing activities
• Merchandising operations
• Accounting cycle
• Completing the accounting cycle
• Classified balance sheet
• Accounting for partnerships
• Partnership form of organization
• Basic partnership accounting