After completing this chapter you should be able to: Explain a current liability, and identify the major types of current liabilities, describe the accounting for notes payable, explain the accounting for other current liabilities, explain the financial statement presentation and analysis of current liabilities,.and other contents. | CHAPTER 11 CURRENT LIABILITIES AND PAYROLL ACCOUNTING Accounting Principles, Eighth Edition Explain a current liability, and identify the major types of current liabilities. Describe the accounting for notes payable. Explain the accounting for other current liabilities. Explain the financial statement presentation and analysis of current liabilities. Describe the accounting and disclosure requirements for contingent liabilities. Compute and record the payroll for a pay period. Describe and record employer payroll taxes. Discuss the objectives of internal control for payroll. Study Objectives 1. On the topic, “Challenges Facing Financial Accounting,” what did the AICPA Special Committee on Financial Reporting suggest should be included in future financial statements? Non-financial Measurements (customer satisfaction indexes, backlog information, and reject rates on goods purchases). Forward-looking Information Soft Assets (a company’s know-how, market dominance, marketing setup, well-trained employees, and brand image). Timeliness (no real time financial information) Current Liabilities and Payroll Accounting Accounting for Current Liabilities Contingent Liabilities Payroll Accounting Notes payable Sales taxes payable Unearned revenues Current maturities of long-term debt Statement presentation and analysis Recording Disclosure Determining payroll Recording payroll Employer payroll taxes Filing and remitting payroll taxes Internal control for payroll Service Cost - Actuaries compute service cost as the present value of the new benefits earned by employees during the year. Future salary levels considered in calculation. Interest on Liability - Interest accrues each year on the PBO just as it does on any discounted debt. Actual Return on Plan Assets - Increase in pension funds from interest, dividends, and realized and unrealized changes in the fair market value of the plan assets. Amortization of Unrecognized Prior Service Cost - The cost of providing retroactive . | CHAPTER 11 CURRENT LIABILITIES AND PAYROLL ACCOUNTING Accounting Principles, Eighth Edition Explain a current liability, and identify the major types of current liabilities. Describe the accounting for notes payable. Explain the accounting for other current liabilities. Explain the financial statement presentation and analysis of current liabilities. Describe the accounting and disclosure requirements for contingent liabilities. Compute and record the payroll for a pay period. Describe and record employer payroll taxes. Discuss the objectives of internal control for payroll. Study Objectives 1. On the topic, “Challenges Facing Financial Accounting,” what did the AICPA Special Committee on Financial Reporting suggest should be included in future financial statements? Non-financial Measurements (customer satisfaction indexes, backlog information, and reject rates on goods purchases). Forward-looking Information Soft Assets (a company’s know-how, market dominance, marketing setup, .
