Total Liabilities:
Total liabilities can be defined as the sum or the total of short-term i.e. current liabilities and long-term i.e. long-term liabilities. The short-term and long-term liabilities are the debts or obligations which needs to be paid on a later decided date.
Long-term debt or non-current liabilities
Long-term debt can be defined as the obligations which are needed to be paid after 12 months or 1 year.
Short-term debt or current liabilities:
Short-term debt can be defined as the obligations which are needed to be paid within 12 months or 1 year.
Debt to equity:
Debt to equity can be defined as a ratio that measures a company’s financial leverage. It is calculated by dividing total liabilities to total shareholder’s equity.
Debt to equity is calculated as under –
Requirement 1
To prepare:
Total liabilities section for Path Leader Wireless including headings and totals for current liabilities and long-term liabilities
Requirement 2
To compute:
Debt to equity ratio
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ACCOUNTING PRINCIPLES 122 5/16 >C<
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