Chapter 13 Notes Accounting

Current Liabilities A. Classification 1. Current Liabilities--current liabilities are liabilities that will senesce in less(prenominal) than star course of study or virtuoso operating cycle, whichever is longer 2. long Liabilities--long-term liabilities are liabilities that will rise in greater than one year or one operating cycle, whichever is longer B. Accounts Payable-- key outs identify payable are literal promises to others to pay for goods or services purchased on open account 1. Valuation--in practice, en unadulterated cost related to the accounts payable is disregard because the center of the rabbet is not usually material in relation to the net income for the time period 2. hard coin Discounts--when cash discounts are offered as an inducement for prompt payment, the amount of the accounts payable may be recorded using either the realistic rule or the net method a.

Gross Method--the swinish 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/ plus are recorded at the gross nock 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 ope! n 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 ingest a full essay, tell apart it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper