Current liabilities are due within the current operating cycle, which is usually a year. Examples of current liabilities include accounts payable, sales tax payable, unearned revenues, and short term notes payable.
Current liabilities are due within the current operating cycle, which is usually a year. Examples of current liabilities include accounts payable, sales tax payable, unearned revenues, and short term notes payable. The payroll process also creates current liabilities. A business may know that a liability exists but not know the exact amount. In these cases, the company will estimate the amount. Common examples include bonus plans, health benefits, and warranties. A contingent liability is a potential rather than an actual liability, because it depends on future events. Let’s discuss current liabilities, and let’s do it in a new way. Reply to this discussion using the Rich Content Editor audio or video features in Canvas. Watch the “How To” videos to learn the steps for recording your response. You will need a webcam for recording video. It is recommended that you research your response and write it down before you reply for a seamless recording. If, for some reason, you cannot reply using audio or video tools, you may post a written response.
Answer the following questions in your post:
What factors determine whether contingent liabilities must be recorded?
What are the current liabilities that must be estimated? Include bonus plans, vacation, health, pension plans, and warranties in your explanation.
What liabilities are created by the payroll process? Why is this important to know?
DQ2 Forms of Business [WLOs: 1, 2, 3, 4] [CLO: 2]
Prior to beginning work on this discussion, read Chapter 12 in the textbook.
In addition, the following MyLab materials listed in the Recommended Resources section this week may provide more in-depth information for this discussion (optional).
Chapter 12 LO2 Try It (Links to an external site.)
Chapter 12 LO3 Try It (Links to an external site.)
Chapter 12 LO4 Try It (Links to an external site.)
Chapter 12 LO5 Try It (Links to an external site.)
Chapter 12 LO6 Try It (Links to an external site.)
Write: Make sure your response addressing the questions below is more than 200 words and that you include an in-text citation or a brief quote from the reading material where appropriate.
There are many forms of businesses, such as a sole proprietorship, partnerships, corporations, and limited liability corporations. Partnerships are formed to pool together talent and individuals’ money. Partnerships have many tax benefits, including the partnership not being taxed; the net income flows directly to the partner’s individual tax return.
What are the characteristics of a partnership?
What types of partnerships are there?
How are partnership profits allocated and taxed?
Why are partnerships different than a limited liability company or an S corporation?
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