ACCT1021 Lecture Notes - Lecture 17: Financial Statement, Other Postemployment Benefits, Accounts Payable
3 Dec 2016
School
Department
Course
Professor
Document Summary
Liabilities are existing obligations arising from past transactions that require future payment of assets or performance of services. If any of these criteria are not met, then you don"t have a liability. Liabilities are typically classified as current or long-term: current liabilities are liabilities due within one year or the operating cycle of the business, whichever is longer. Common examples of current liabilities are accounts payable, short-term notes payable, accrued payables such as wages, taxes and interest payables, dividends payable, unearned revenues and current portion of long-term debt: long-term liabilities are liabilities that are not current. These would include capitalized lease obligations, bonds payable, long-term notes payable and mortgage payable: interest expense represents the cost of borrowing money. Unlike most other expenses, interest expense is recognized with the mere passage of time. Types of liabilities - liabilities can also be classified according to their nature: definite liabilities are liabilities whose existence and the amount of obligation are known with certainty.
