会计英语 第四版 叶建芳07.ppt

YE SUN AccountingEnglish Financial Accounting 1 Lesson summary 6 Lesson 7 Liabilities The Nature of Liabilities Distinction Between Debt and Equity The acquisition of assets is financed from two sources: Accounts Payable Notes Payable Notes Payable Notes Payable Interest Payable Interest expense is the compensation to the lender for giving up the use of money for a period of time. The liability is called interest payable. To the lender, interest is a revenue. To the borrower, interest is an expense. Interest PayableExample Interest PayableExample Payroll Liabilities Employers incur several expenses and liabilities from having employees. Payroll Liabilities Unearned Revenue Deferred Income Taxes Corporations pay income taxes following tax law. Deferred Income Taxes Deferred Income TaxesExample Deferred Income TaxesExample Deferred Income TaxesExample Deferred Income TaxesExample An existing condition, situation, or set of circumstances involving uncertainty as to possible asset (contingent asset) or liability (contingent liability) that will ultimately be resolved when one or more future events occur or when such event or events fail to occur. Contingent assets are claims or rights to receive assets, which may become valid eventually. Examples are: Pending litigation whose probable outcome is favorable Possible tax refunds in tax disputes Contingent assets are not accrued! Contingent liability involve situations of possible loss that are dependent on some future event(s). The likelihood of occurrence of the event may be: Remote (slight) Reasonably possible (more than remote but less than likely) Probable (likely) Estimated losses from contingent liability are accrued as liabilities if: It is probable that a liability has been incurred, and The amount of loss can be reasonably estimated. The interpretation of these terms is often based on lawyers’ opinions. To determine whether a liability should be recorded, evaluate: The