中级财务会计英文ch08.pptVIP

Liabilities Chapter 8 Learning Objectives Explain the characteristics of a liability. Account for compensated absences. Understand and record payroll taxes and deductions. Record property taxes. Account for warranty costs. Explain the terms “probable,” “reasonably possible,” and “remote” related to contingencies. Record and report a loss contingency. Disclose a gain contingency. Learning Objectives 10. Explain the reasons for issuing long-term liabilities. 11. Understand the characteristics of bonds payable. 12. Record the issuance of bonds. 13. Amortize discounts and premiums under the straight-line method. 14. Compute the selling price of bonds. 15. Amortize discounts and premiums under the effective interest method. 16. Explain extinguishment of liabilities. 17. Understand bonds with equity characteristics. 18. Account for long-term notes payable. 19. Understand the disclosure of long-term liabilities. Defined by SFAC No. 6 as: Probable future sacrifices of economic benefits arising from present obligations of a particular entity to transfer assets or provide services to other entities in the future as a result of past transactions or events. It involves a present duty or responsibility of the company to one or more entities that will be settled by the probable future transfer or use of assets at a specified or determinable date, on occurrence of a specific event, or on demand. The duty or responsibility obligates the company, leaving it little or no discretion to avoid the future sacrifice. The transaction or other event obligating the company has already happened. Interest that is not explicitly specified in the terms of the liability. Need not be recognized. Obligations arising from the company’s ongoing operations -- includes the acquisition of inventory, supplies, materials and services. Commonly called trade payables. Other current payables should be reported separately. Notes that arise from the same types of transactions as trade payables. Can be