Liabilities
A liability is a probable future payment of assets or services that a company is presently obligated to make as a reult of a past trasaction or even.
Current Liabilities
Short term liablilites, Obligations due within one year or the copmany's operating cycle, whichever is longer
Long term liablilites
Oblisgation not expected to be paid within the onlger of one year or the company's operating cycle.
Known Liablilites
Set by agreeements, contracts, or laws and are measurable.
Examples of Known Liablilites
Accounts Payable/Trade accounts payable, Sales Taxes Payable, Uneraned Revendues/reffered revenues
Entry to recourd
Cash
Unearned Revenue
Entry to record revenue for portioned earned
Unearned Revenue
Revenue
Short Term Notes Payable
Written promise to pay a specified amount on a specitd future date within one year or the company's operating cycle, whichever is longer.
Examples of Shor Term Notes Payable
Note given to extend credit period, inters-bearing note is substitied for an overdue account payable.
Entry to record Substition of note payable for overdue
Accounts Parable
Notes Payable
Entry to record parment when note becomes due
Cash
Notes Parable
Entry to record Accrual of interest
Interest Expense
Interest Payable
Payment of note when interest has bee accrued
Interest Payable
Interest Expens
Notes Payable
Cash
Gross Pay
total compensation an employee earns
Net Pay
Gross pay less all deductions
Paryoll Dedutions
Amount witheld froma n employee's gros pay, commonly called withholdings.
FICA Taxes
Emplyer must pay FICA tazes egaul in amount to FICA taxes withheld fomr employee.
Federal and Stated Unemployment taxes
Employers must pay a federal unemployment taz on wages and salaries paid to employees.
Estimated Liablilites
Estimated obligations of uncertain amounts that can be resasonable estimated, ie, Bonus Plans, Vacation, Benefits
Contingent Liablilites
Potentional liabilities that depend on a future events arising from past transactions