LIABILITIES F2F SESSION

product warranties

promises made by a seller to a buyer to make good for a deficiency of quality, quantity, or performance in a product

recognized in the period the sale is made

when is a warranty expense recorded?

premiums and coupons

offered in exchange for labels, box tops, wrappers, and other evidence of purchase

provisions

product warranties

premiums and coupons

contingencies

liabilities of uncertain timing and amount

promises made by a seller to a buyer

offered in exchange for labels

possible obligations whose existence will be confirmed by uncertain future events

no

when possibility of outflow of econ resources is remote, a contingent liability is disclosed

is a contingent liability recognized in the sfp?

what is an exception

exchanges

maturity/face amount

general principle of valuation of liabilities

they are measured at amounts established in …

current liabilities are valued at

current liabilities

obligations whose liquidations is considered expected to require the use of existing resources classified as current assets or the creation of other current liabilities

maturity or liquidation preference

within current liability accounts may be listed in the order of _________ or order of __________

accounts payable

receipt of goods or time legal title is passed

represents the obligations owed to others for goods, supplies, and services purchased on an open account

*recorded to coincide with or

not be

checks issued before the end of the period in payment for the A/P, but not mailed to creditors, should (be/not be) accounted for as cash payments for the peruod

accrued liabilities

expenses already incurred but not paid as of year-end

adjusting entries are then made

-net income is overstated in current and understated in next

-liabilities understated

if an entity fails to accrue expenses at year-end, outcomes are

dividends

cash and share dividends

proportionate distributions of earnings to shareholders

usually declared

cash dividend payable

recorded when cash dividend is declared

share dividend distributable

when a share dividend is declared, the _ is recorded and reported in equity

unearned revenues

account called for when companies receive cash prior to its performance of services or issue of merchandise

ncl

obligations maturing beyond 1 year

normally require a formal agreement which includes certain covenants

bond indenture or note agreement

covenants and restrictions are found in the _

bonds payable

obligation of the issuing company to pay a sum of money at a designated maturity date plus periodic interest at a specified rate on the face value

bonds

debt instruments issued by an entity to borrow funds from the general public or institutional investors

may be sold through an underwriter

serial bond

registered bond

coupon bond

convertible bond

callable bond

bond issued in which principal is repaid in regular installments over the life of the issue

issued in the name of the owner

bond thats not registered (holders of the bearer must send it in to receive interest payment)

bond that can be converted into ordinary shares at bondholder’s option

subject to retirement at a stated amount prior to maturity at the option of the issuer

bond indenture

bond certificate

terms of the bond issue are set out in a legal document called

after bond indenture is prepared, this is made

the time bonds are sold

when are discounts and premiums recorded?

decrease

increase

the amortization of bond premium _ amt of bond interest expense, while amortization of discounts _ it

working capital

excess of CA over CL

measure of liquidity

bonds payable in the liability section

no, liability valuation accounts lang

unamortized premiums and discounts r reported in the __ account

are premiums and discounts liability accounts?

bond issue costs

yes

some of the costs associated with issuing bonds include engraving and printing etc which are debited to

are they amortized?

effective interest method

accounting standard’s preferred procedure in amortization

mortgage

long-term financing instrument used to purchase property

principal

in paying mortgage, does interest or principal increase over time?