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Business Accounting Connect Access Card for Financial Accounting: Information and Decisions

Current liabilities are the company’s short-term financial obligations that are due for one year or more that the normal company’s operating cycle. To determine: Classifying of liabilities. Current liabilities are shown under the liabilities side of the balance sheet . Examples: Creditors, Accounts payables, Short-term loans. Portion of long-term note due in 15 months. Notes payable are written agreement (promissory notes). The balance in Notes payable represents the amounts that remain to be paid. Notes in 15 month is current liabilities because the company’s operating cycle is 15 months and note due is also in 15 months. The amount due within one year of the balance sheet date will be a current liability, Company’s operating cycle is 15 months. So, it is Current Liability. Note payable maturing in 2 years. Note payable maturing in 2 years is not current liabilities. The amount due within one year of the balance sheet date will be a current liability, and the amount not due within one year of the balance sheet date will be a long term liability. As such, notes payable is more than the Company’s operating cycle. So, it is a long term liability. Note payable due in 18 months. Note payable due in 18 months is not current liabilities. The amount due within one year of the balance sheet date will be a current liability, and the amount not due within one year of the balance sheet date will be a long term liability. As such, notes payable is more than the Company’s operating cycle. So, it is a long term liability. Note payable due in 11 months. Note payable due in 11 months is current liabilities. The amount due within one year of the balance sheet date will be a current liability, and the amount not due within one year of the balance sheet date will be a long term liability. Under the Company’s operating cycle which is 15 months. So, it is current liability. FICA taxes payable. FICA taxes payable is current liability until the taxes are paid to the (IRS) Internal Revenue Service. Salaries payable. Salary payables are the amount of liability that company owns towards its employees for the services that are provided by them but not yet paid. Salaries payables are considered as current liability.

Current liabilities are the company’s short-term financial obligations that are due for one year or more that the normal company’s operating cycle. To determine: Classifying of liabilities. Current liabilities are shown under the liabilities side of the balance sheet . Examples: Creditors, Accounts payables, Short-term loans. Portion of long-term note due in 15 months. Notes payable are written agreement (promissory notes). The balance in Notes payable represents the amounts that remain to be paid. Notes in 15 month is current liabilities because the company’s operating cycle is 15 months and note due is also in 15 months. The amount due within one year of the balance sheet date will be a current liability, Company’s operating cycle is 15 months. So, it is Current Liability. Note payable maturing in 2 years. Note payable maturing in 2 years is not current liabilities. The amount due within one year of the balance sheet date will be a current liability, and the amount not due within one year of the balance sheet date will be a long term liability. As such, notes payable is more than the Company’s operating cycle. So, it is a long term liability. Note payable due in 18 months. Note payable due in 18 months is not current liabilities. The amount due within one year of the balance sheet date will be a current liability, and the amount not due within one year of the balance sheet date will be a long term liability. As such, notes payable is more than the Company’s operating cycle. So, it is a long term liability. Note payable due in 11 months. Note payable due in 11 months is current liabilities. The amount due within one year of the balance sheet date will be a current liability, and the amount not due within one year of the balance sheet date will be a long term liability. Under the Company’s operating cycle which is 15 months. So, it is current liability. FICA taxes payable. FICA taxes payable is current liability until the taxes are paid to the (IRS) Internal Revenue Service. Salaries payable. Salary payables are the amount of liability that company owns towards its employees for the services that are provided by them but not yet paid. Salaries payables are considered as current liability.

Solution Summary: The author explains that current liabilities are the company's short-term financial obligations that are due for one year or more than the normal company’s operating cycle.

Connect Access Card for Financial Accounting: Information and Decisions

Connect Access Card for Financial Accounting: Information and Decisions

8th Edition

ISBN: 9781259662966

Author: John J Wild

Publisher: McGraw-Hill Education

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Connect Access Card for Financial Accounting: Information and Decisions

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