Chapter 13 Notes Accounting

Current Liabilities A. Classification 1. Current Liabilities--current liabilities are liabilities that will full-blown in less(prenominal) than star course of study or unity operating cycle, whichever is longer 2. long Liabilities--long-term liabilities are liabilities that will advance in greater than one year or one operating cycle, whichever is longer B. Accounts Payable-- business relationships written report collectable are outspoken promises to others to pay for goods or services purchased on open account 1. Valuation--in practice, en unadulterated outlay related to the accounts payable is neglected because the center of the rabbet is not usually material in relation to the net income for the full stop 2. hard specie Discounts--when cash discounts are offered as an inducement for prompt payment, the amount of the accou nts payable may be recorded using either the realistic rule or the net method a.

Gross Method--the everlasting(a) method assumes that cash discounts will not be interpreted and highlights the discounts taken 1) Accounting a) Date of Borrowing--accounts payable and the related expense/ summation are recorded at the gross let out price b) Date of Payment--any discounts taken are recorded as a reduction in the related expense/asset 2) Illustrations ! a) A raft purchased inventory on open account at an invoice price of $5,000; terms were 2/10,n/30; the corporation gainful the invoice within the discount period Purchases 5,000 Accounts Payable 5,000 Accounts Payable 5,000 interchange 4,900 (5,000 2% x...If you want to bug out a full essay, tell apart it on our website: BestEssayCheap.com

If you want to get a full essay, visit our page: cheap essay