Womack Report

April 19, 2007

Accounting, April 19

Filed under: Accounting,Notes,School — Phillip Womack @ 10:05 am

Test next Tuesday. Liabilities today.Classification of Liabilities matches classification of assets.

  • Current Liabilities are liabilities which will be satisfied within one year or one operating cycle.
  • Long-Term Liabilities are liabilities which will not be satisfied within one cycle.

Liquidity is heavily influenced by how liabilities are classified.

Current liabilities can be futher divided into Definitely Determinable liabilities and Estimated Liabilities.

Definitely determinable liabilities includes accounts payable, bank loans, notes payable, dividends payable, and so forth. Liabilities that can have numbers put to them.

Payroll has a lot of associated liabilities. Be careful with it.

Estimated liabilites are liabilities that are certain to exist, but uncertain in amount. Taxes are common estimated liabilities.

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