Lecture "International accounting - Chapter 8: Liabilities and payrol" has content: Current liabilities of known amount, current liabilities that must be estimated, accounting for payroll, accounting for payroll. | CHAPTER 9: CURRENT LIABILITIES AND PAYROLL Learning Objectives After studying Chapter 9, you should be able to: Account for current liabilities of known amount Account for current liabilities that must be estimated Calculate payroll and payroll tax amounts Journalize basic payroll transactions Chapter 9: Current Liabilities and Payroll Quoc Nhat . Current Liabilities of Known Amount Chapter’s content . Current Liabilities of Known Amount . Current Liabilities that Must Be Estimated . Accounting for Payroll . Journalizing Payroll Transactions . Accounts Payable Amounts owed for products or services purchased on account are accounts payable. Since these are due on average in 30 days, they are current liabilities. We have seen many accounts payable illustrations in preceding chapters A reproduction of the Chapter 4 entry that Smart Touch made on June 3 to purchase $700 of inventory on account follows: Jun 3 Inventory (A+) Accounts payable 700 (L+) 700 Purchase on account. . Current Liabilities of Known Amount . Current Liabilities of Known Amount . Short-Term Notes Payable . Accounts Payable Then, when Smart Touch paid the liability and took advantage of the purchase discount on June 15, the entry was as follows: Jun Accounts payable 15 Cash (A–) Inventory (L–) 700 (A–) Paid on account within discount period. 679 21 Short-term notes payable are a common form of financing. Short-term notes payable are promissory notes that must be paid within one year. Consider how the entry on June 3 would change if Smart Touch had purchased the inventory with a 10%, one-year note payable. The modified June 3 purchase entry follows: 2013 Account title Jun 3 Inventory Short-term notes payable Debit Credit 700 700 Purchased inventory on a one-year, 10% note. NguyenQuocNhat – 1 CHAPTER 9: CURRENT LIABILITIES AND PAYROLL . Current Liabilities of Known Amount . Current Liabilities of Known
