MGT120H5 Chapter Notes - Chapter 8: Canada Revenue Agency, Contingent Liability, Current Liability

• School: UTM
• Department: Management
• Course: MGT120H5
• Professor: Catherine Seguin

Document Summary

Gst is a current liability and it"s payable annually, quarterly, or monthly to the canada revenue agency (cra) depending on the volume of business. This is levied at the point of sale to the final customer, unlike gst. It would apply to the asset when the company purchased at the cash register. It is a current liability, it is payable quarterly or monthly depending on the payer"s volume of business. Estimated warranty payable: when a product is sold with a warranty, the cost of the warranty should be recognized in the same period that the revenue from the sale of the product is recognized whatever the warranty life. The company won"t know which products will be defective. The exact amount of warranty expense can"t be known with certainty, so the business must estimate warranty expense and the related warranty liability: suppose a company purchases power-tools, made sales of ,000 is subject to product warranties.