Lecture Accounting principles (11E): Chapter 11 - Coby Harmon

Prepared by<br /> Coby Harmon<br /> University of California, Santa Barbara<br /> Westmont College<br /> <br /> 11-1<br /> <br /> 11<br /> <br /> Current Liabilities and<br /> Payroll Accounting<br /> <br /> Learning Objectives<br /> After studying this chapter, you should be able to:<br /> [1] Explain a current liability, and identify the major types of current liabilities.<br /> [2] Describe the accounting for notes payable.<br /> [3] Explain the accounting for other current liabilities.<br /> [4] Explain the financial statement presentation and analysis of current<br /> liabilities.<br /> [5] Describe the accounting and disclosure requirements for contingent<br /> liabilities.<br /> [6] Compute and record the payroll for a pay period.<br /> [7] Describe and record employer payroll taxes.<br /> [8] Discuss the objectives of internal control for payroll.<br /> 11-2<br /> <br /> Preview of Chapter 11<br /> <br /> Accounting Principles<br /> Eleventh Edition<br /> Weygandt Kimmel Kieso<br /> 11-3<br /> <br /> Current Liabilities<br /> Current liability is debt with two key features:<br /> 1. Company expects to pay the debt from existing<br /> current assets or through the creation of other current<br /> liabilities.<br /> 2. Company will pay the debt within one year or the<br /> <br /> operating cycle, whichever is longer.<br /> <br /> Current liabilities include notes payable, accounts payable, unearned<br /> revenues, and accrued liabilities such as taxes payable, salaries and<br /> wages payable, and interest payable.<br /> <br /> 11-4<br /> <br /> LO 1 Explain a current liability, and identify the<br /> major types of current liabilities.<br /> <br /> Accounting for Current Liabilities<br /> Question<br /> To be classified as a current liability, a debt must be<br /> expected to be paid:<br /> a. out of existing current assets.<br /> b. by creating other current liabilities.<br /> c. within 2 years.<br /> d. both (a) and (b).<br /> <br /> 11-5<br /> <br /> LO 1 Explain a current liability, and identify the<br /> major types of current liabilities.<br /> <br />