Chapter 9, Problem 4DQ

Summary Introduction

Introduction: Liabilities are financial obligation of a company to other entities. These may be called as right against the company or provide services or products to others.

Current liabilities are those financial obligations of a company that become due for payment within one year, whichever is higher. Current liabilities includes items like payroll taxes payable, sales tax, income tax payable, accrued expenses, accounts payable, short term debt etc.

Non-current liabilities are those financial obligations of a company that become due for payment in longer period i.e. not in current financial year like long term bonds, debentures, deferred tax liabilities, pension fund liabilities etc.

To determine: To compute the selling price of the items.