Chapter 10 - Reporting and interpreting liabilities. Previous chapters focused on items related to the assets section of the balance sheet. This chapter focuses on items related to the liabilities section of the balance sheet. | Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Fundamentals of Financial Accounting 3e by Phillips, Libby, and Libby. Chapter 10 Reporting and Interpreting Liabilities PowerPoint Authors: Susan Coomer Galbreath, ., CPA Charles W. Caldwell, ., CMA Jon A. Booker, ., CPA, CIA Fred Phillips, ., CA Chapter 10: Reporting and Interpreting Liabilities. The Role of Liabilities Current liabilities are short-term obligations that will be paid with current assets within the company’s current operating cycle or within one year of the balance sheet date, whichever is longer. Buys goods and services on credit Obtains short-term loans Issues long-term debt Liabilities are created when a company: 10- Part I Liabilities play a significant role in financing most business activities. Liabilities are created when a company . . . buys goods and services on credit, obtains short-term loans to cover gaps in cash flows, and issues long-term debt to obtain money for expanding into new regions and markets. Part II To help financial statement users know when liabilities must be repaid, companies prepare a classified balance sheet. Current liabilities are defined as short-term obligations that will be paid with current assets within the company’s current operating cycle or within one year of the balance sheet date, whichever is longer. The Role of Liabilities The liability section of the General Mills 2007 and 2008 comparative balance sheets. 10- On this screen we show the liability section of the comparative balance sheets for General Mills for 2007 and 2008. All amounts are expressed in millions of dollars. As you can see, General Mills owed various types of liabilities at the end of each of these fiscal years. To help financial statement users know when liabilities must be repaid, companies prepare a classified balance sheet where current liabilities are reported separately from other liabilities. The excerpt of the . | Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Fundamentals of Financial Accounting 3e by Phillips, Libby, and Libby. Chapter 10 Reporting and Interpreting Liabilities PowerPoint Authors: Susan Coomer Galbreath, ., CPA Charles W. Caldwell, ., CMA Jon A. Booker, ., CPA, CIA Fred Phillips, ., CA Chapter 10: Reporting and Interpreting Liabilities. The Role of Liabilities Current liabilities are short-term obligations that will be paid with current assets within the company’s current operating cycle or within one year of the balance sheet date, whichever is longer. Buys goods and services on credit Obtains short-term loans Issues long-term debt Liabilities are created when a company: 10- Part I Liabilities play a significant role in financing most business activities. Liabilities are created when a company . . . buys goods and services on credit, obtains short-term loans to cover gaps in cash flows, and issues long-term
