Vous êtes sur la page 1sur 27

| 



|   


|  


    
|  
What is a liability?

6 ! probable future payment of assets or


services that a company is presently
obligated to make as a result of past
transactions or events.
|  

6 here are three crucial factors that


make up part of the definition of a
liability:
1. hey are due to past transactions or events.
2. he company has a present obligation.
3. It is for a future payment of assets or
services.
|  

6 uiabilities do not include all expected


future payments.

6 uiabilities are recorded when the


transaction has occurred as per the
revenue recognition principle.
|  
—xample:

6 î  Corporation yearly payroll is $6,000,000, paid on


the first of the month for the prior month¶s work.

6 herefore, we need accrual for the previous month:

ë  
      
 ë
 

   
  
 
    
  
 

|  
Current uiabilities:

6 —xpected to be paid within one year of


the balance sheet date or within the
operating cycle of the business,
 , using current
   ,
assets.
|  
Current uiabilities:

6 ëemand loans are loans that have no fixed


due date.

6 Reported as a current liability because the


creditor may demand payment within one
year of the balance sheet or the company¶s
operating cycle, whichever is longer.
|  
Current uiabilities:

6 —xamples include:
6 !ccounts payable
6 Wages payable
6 Warranty liabilities
6 Unearned revenue
6 Current portion of uong-
uong-erm debt
|  
uong--erm uiabilities:
uong

6 ëo not require payment within one year


or the current operating cycle,
whichever is longer.

6 —xpected to be paid out of non-


non-current
assets.
|  
uong--erm uiabilities:
uong

6 —xamples include:
uong--erm Notes Payable
6 uong
6 Mortgage Payable
6 uease uiabilities
6 Bonds Payable
 


  

  
Current Portion of uong
uong--erm ëebt:

6 Portion uong-
uong-erm uiability due within
one year of the balance sheet date or
one operating cycle, whichever is
longer.

6 Reported as a Current uiability on the


balance sheet.
 


  

  
Current Portion of uong
uong--erm ëebt:

6 No journal entry required; merely reclassified


for balance sheet presentation.

6 he division of the current portion and the


long-term portion involves the principal
long-
amount only (any interest would be accrued
in the current period as interest payable).
|  
Known
nown (ëeterminable) uiabilities:

6 uiabilities are determinable when:


6 It is known whom to pay,
6 When to pay and,
6 How much to pay.

6 hey are set by agreements, contracts,


or laws and are measurable.
|  
Known (ëeterminable) uiabilities:

6 —xamples include:
6!ccounts Payable
6Payroll
6Sales axes
6Unearned Revenue
6Notes Payable
|  
rade !ccounts Payable:

6 !mounts owed to suppliers for good or


services purchased on credit.

6 ypically due within the current period,


they are current liability.
|  
Payroll uiabilities:

6 here are many different payroll related


liabilities.

6 !ll are current liabilities.


|  
Payroll uiabilities:

6 —xamples include:
6—I Payable
6—mployee Income axes Payable
6Union ëues Payable
6Wages Payable
|  
Provincial Sales ax:

6 ! consumption tax levied on the sales


to the FIN!u users of products.

6 Consumers pay the tax on their


purchases.
|  
Provincial Sales ax:

6 he company collecting it must remit it


to the government.

6 Remittances occur regularly; therefore


this is a current liability.
|  
-oods and Services ax:

6 ! value added tax on just about all


goods and services sold in Canada.

6 ëiffers slightly from PS - all parties


involved in the transaction of taxable
goods and services must charge the
-S on each transaction.
|  
-oods and Services ax:

6 ! registrant must pay -S for taxable goods


purchased (Input ax Credits) and must
collect it on taxable goods sold.

6 Input ax Credits are deducted from the -S


amounts collected, and the net amount is
remitted to (or collected from) the
government.
|  
-oods and Services ax:

6 -S Receivable account is used to


account for the Input ax Credit. his
is a current asset.

6 -S Payable is used to account for the


current liability due to the government.
|  
-oods and Services ax:

6 !t the end of the reporting period, the


presentation on the balance sheet
depends on whether the net balance is
a credit or a debit. Only one is
presented on the balance sheet, not
both.
|  
-oods and Services ax:

6 Note: Stores that offer ³No P.S.. and


No -.S..´ are still obligated to remit
these taxes to the respective
governments. he underlying product
is not suddenly tax exempt; you are
merely getting a discount equivalent to
the taxes paid.
|  
Unearned Revenues:

6 !mounts received in advance from


customers for future products or services.

6 —ventually become µearned¶ due to the


passage of time or the deliverance of future
products or services.
|  
 


  

  

üuestions?
   
üS 13-
13-6:
Credit -S Payable $514.50

—xercise 13-
13-3:
Part 2: ou are given a payment schedule, not a
balance sheet.

—xercise 13-
13-6:
a) Use 1.5 months

—xercise 13-
13-7:
c) PS Payable $19,260

Vous aimerez peut-être aussi