Accounting All-in-One For Dummies, with Online Practice, 2nd Edition

Chapter 4

Digging for Debt in the Balance Sheet’s Liabilities Section

IN THIS CHAPTER

Defining current liabilities

Understanding the impact of payroll and taxes

Finding out about long-term debt

Knowing when loss contingencies are reportable

Accounting for bonds

Nobody likes debt, but it’s often an inevitable part of a company keeping its doors open for business. This chapter covers both current and long-term debt, collectively known as liabilities. You discover the types of current liabilities that help a business manage its day-to-day operations. You also find out about long-term debt obligations that businesses use to acquire assets. This chapter discusses basic long-term debt — such as mortgages and notes payable — and bonds, focusing on the many facets of this complicated topic. A third type of liability — loss contingencies — also gets some space in this chapter. These liabilities aren’t always included in financial accounting reports; you get the lowdown on when and how to include ...