tailieunhanh - Lecture Financial accounting: Tools for business decision-making (7th edition) – Chapter 10

Chapter 10 - A further look at financial statements. This chapter include objectives: Account for current liabilities, account for instalment notes payable, identify the requirements for the financial statement presentation and analysis of liabilities. | CHAPTER 10: A FURTHER LOOK AT FINANCIAL STATEMENTS LO 1: Account for current liabilities. LO 2: Account for instalment notes payable. LO 3: Identify the requirements for the financial statement presentation and analysis of liabilities. LO 4: Account for bonds payable (Appendix 10A). LEARNING OBJECTIVES Present obligations resulting from past transactions Classified as current and non-current Liabilities Liabilities must be settled in the future by transfer of assets or provision of services Expected to be paid or settled: Through payment by cash, through the transfer of goods or services or through the creation of other current liabilities Within one year of the date on the statement of financial position All other liabilities are classified as non-current (or long-term) liabilities Current Liabilities Types of current liabilities include: Bank indebtedness from operating lines of credit Accounts payable and accrued liabilities Unearned revenue Notes and loans payable Sales taxes . | CHAPTER 10: A FURTHER LOOK AT FINANCIAL STATEMENTS LO 1: Account for current liabilities. LO 2: Account for instalment notes payable. LO 3: Identify the requirements for the financial statement presentation and analysis of liabilities. LO 4: Account for bonds payable (Appendix 10A). LEARNING OBJECTIVES Present obligations resulting from past transactions Classified as current and non-current Liabilities Liabilities must be settled in the future by transfer of assets or provision of services Expected to be paid or settled: Through payment by cash, through the transfer of goods or services or through the creation of other current liabilities Within one year of the date on the statement of financial position All other liabilities are classified as non-current (or long-term) liabilities Current Liabilities Types of current liabilities include: Bank indebtedness from operating lines of credit Accounts payable and accrued liabilities Unearned revenue Notes and loans payable Sales taxes Property taxes Payroll Current maturities of non-current debt Provisions and contingent liabilities Current Liabilities Pre-arranged agreement between a company and a lender to allow the company to borrow up to an agreed-upon amount: To help manage temporary cash shortfalls Interest is charged using a floating (or variable) interest rate Security (collateral) may be required by bank When used, results in bank indebtedness Operating Line of Credit Federal Goods and Services Tax (GST) Provincial Sales Tax (PST or QST) Combined into one harmonized sales tax (HST) in some provinces Sales Taxes May or may not be included in sale price Must be remitted periodically to respective governments: When paid, debit Sales Tax Payable account and credit Cash Sales Tax Payable Businesses that own property pay property taxes for each calendar year to municipal or provincial governments Property taxes are calculated at a specified rate for every $100 of the assessed value of the property Property Taxes Upon