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Intermediate Accounting, Tenth Canadian Edition, Volume 2
book

Intermediate Accounting, Tenth Canadian Edition, Volume 2

by Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Nicola M. Young, Irene M. Wiecek, Bruce J. McConomy
June 2013
Intermediate to advanced content levelIntermediate to advanced
832 pages
11h 42m
English
Wiley
Content preview from Intermediate Accounting, Tenth Canadian Edition, Volume 2

Chapter 13

Non-financial and Current Liabilities

OVERVIEW

Resources or assets of a business are financed either by the business's internal operations or by funds from entities external to the business. Two main external sources of funds are creditors, who are owed liabilities, and owners, who are contributors of equity capital. In this chapter, we begin our in-depth discussion of liabilities.

Due to the nature of business activities, it is common for goods and services to be received with the related payment to be made days or weeks later. Therefore, at a specific point in time, such as at a statement of financial position date, we may find that a business has obligations to pay for merchandise received from suppliers (accounts payable), salaries and wages incurred (salaries and wages payable), and interest incurred (interest payable). The business may also have obligations to remit amounts due to government agencies that are related to property tax incurred (property tax payable), sales tax charged to customers and not yet remitted to the government (sales tax payable), and other amounts due to government agencies in connection with employee compensation (such as withholding taxes payable). These current (short-term) liabilities are classified separately from non-current liabilities, in order to provide information about obligations that will place a demand on the business's current assets.

Non-financial liabilities are more difficult to account for, because there may be uncertainty ...

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Publisher Resources

ISBN: 9781118300855Purchase book