ACCT 3001 Lecture Notes - Lecture 9: State Income Tax, Payroll Tax, Contingent Liability
Document Summary
Probable future sacrifices of economic benefits arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a result of past transactions or events. Current liabilities are obligations whose liquidation is reasonably expected to require use of existing resources properly classified as current assets, or the creation of other current liabilities. Due within 1 year, or operating cycle, whichever is longer (from balance sheet date) Typical current liabilities: ap, notes payable, dividends payable, customer advances and deposits, unearned revenues, sales taxes payable. Income taxes payable: employee-related liabilities, current maturities of long-term debt: no journal entry, it"s how you classify long term debt on the balance sheet, short-term obligations expected to be refinanced. Ex notes payable problem: on 10/1 borrow ,000 at 5% interest for 6 months. 12/31 (to record interest at the end of the year) If we were to pay off the note, had not accrued interest.
