会计专业英语工业和信息化高职高专“十二五”规划教材立项项目作者孙晓媛7课案.pptVIP

Accounting English Accounting English Lesson seven liabilities Learning objectives 1．The types of current liabilities 2．How to account for account payable, unearned revenue 3．Account for debentures (bonds)payable 4．Issue bonds payable discount and premium Words and phrase 7.1 Current liabilities Current liabilities refer to the obligations that are reasonably expected to be paid on demand from existing current assets or through the creation of other current liabilities. As in the case of current assets, the time period for payment is one year or one operating cycle, whichever is longer. Current liabilities include: short-term notes payable, accounts payable ,wages payable, warranty liabilities, lease liabilities, taxes payable, and unearned revenues. 7.1.1 Short –term Bills(notes) and Accounts payable They are due in one year, but whenever bank loans are obtained, notes payable are issued. Notes payable are also issued on other occasions including the purchase of a real estate or a costly equipment, and sometimes other kinds of purchasing. Accounts payable are short-term debts to suppliers for purchase of goods or acquisition of services One of a merchant’s most common transactions is the credit purchase of inventory, recorded as follows with assumed amounts: Inventory 600 Account payable 600 Purchase on account Example: In addition to recording the bill payable and its eventual payment. The business must also pay interest expense and accrue interest expense and interest payable at the end of the period. The following entries are typical of this liability: 20×1 Sept.30 Inventory 8?000 Bills payable ?8?000 Purchased inventory by issuing a one-year, 10% bill payable Dec.31 Interest expense($8?000?0.10?3/12) 200 Interest payable 200 Adjusting entry to accrue interest expense at year-end The following entry recor