the following items represent liabilities on a firms balance sheet.... A. an amo
ID: 2357930 • Letter: T
Question
the following items represent liabilities on a firms balance sheet.... A. an amount of money owed to a supplier based on the terms 2/20, n/40, for which no note was executed. B. An amount of money owed to a creditor on a note due April 30, 2011 C. An mount of money owed to a creditor on a note due August 15, 2012 D. An mount of money owed to employees for work performed during the last week in December. E. An mount of money owed to a bank for the use of borrowed funds due on march 1, 2011 F. An mount of money owed to a creditor as an annual installment payment on a ten year note. G. An amount of money owed to the federal government based on the company's annual income. 1. For each item, state whether it should be classified as a current liability on the Dec 31 2010, balance sheet, Assume that the operating cycle is short than one year. If the item should not be classifies as a current liability, indicate where on the balance sheet i should be presented.Explanation / Answer
Current liabilities are any type of obligations or debts that are to be settled in full within one calendar year. Examples of these types of liabilities would be invoices for goods that are to be paid within thirty days of receipt, short-term loans that must be paid off in six months to a year, or even any debts that must be paid immediately. In most situations, current liability is satisfied by using cash assets on hand to retire the debt, using a structured schedule that minimizes the accumulation of additional debt in the form of finance charges. so . B. An amount of money owed to a creditor on a note due April 30, 2011 C. An mount of money owed to a creditor on a note due August 15, 2012 D. An mount of money owed to employees for work performed during the last week in December. the account title that is normally used to report the item on the balance sheet.BALANCE SHEET AND STATEMENT OF CASH FLOWS
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