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Lecture Documents Accounting - Obligation

Lecture Documents Accounting - Obligation
Course

Intro To Accounting (AC 210)

316 Documents
Students shared 316 documents in this course
Academic year: 2021/2022
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University of Alabama

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Obligations

Liabilities are present-day debts of the enterprise arising as a result of past events, the completion of which is expected to result in an outflow from the enterprise of resources containing economic benefits. Similarly to assets, debts also have two main groups. The two types of debt are current debt and long-term debt. The following will be explained one by one about the definition and understanding of each debt. Current debts current debts are those obligations that are due in one year or in one cycle of normal activities of the company. A normal cycle is the period of time required from the time cash is paid for the purchase of goods or services needed for production until cash from the sale of the company's products is received. Debt that is classified as current debt is debt that will be paid off within a period of one year or the operating cycle of the company. Current debt can also be defined as liabilities that are expected to be repaid with the company's wealth classified as current assets or by incurring new current debts. Because debt involves sacrifices in the future, current debt contains an element of uncertainty. Based on the level of uncertainty, current debt is divided into: 1) current debt that can be determined, 2) current debt that is uncertain or conditional (contingent). As for the groups of current accounts payable, they are as follows: accounts payable accounts payable are accounts receivable, that is, they are debts derived from the main activity of the company (credit purchases of goods and services). This account is usually accompanied by a list of accounts payable containing details by the name of the creditor. Notes payable notes payable or often referred to as notes

payable is the opposite of notes receivable. In the event of issuing a written promise to pay a certain amount of money on certain. Bank debt bank debt is a short-term or long-term obligation to a bank or financial institution caused by a loan received by a company. Salary debts, interest, and other debts included in this class are expenses that occur but have not yet been paid. Sometimes this kind of debt is called accrued liabilities. Dividend payable cash dividend payable is the amount owed by the company to the shareholders due to the distribution announced by the board of Commissioners. After the announcement of the company owed to shareholders. Usually the dividend will be paid within one year. It is therefore classified as current debt. Dividend payable in the form of additional shares (dividend shares) is not recognized as debt because it does not require the expenditure of property or services in the future. Long-term debt long- term debt is debt that has a maturity of more than one year. Debt that is classified as long-term debt is debt that will be paid off within a period of more than one year or exceeding the operating cycle of the company. Examples of long-term debt include bond debt, long-term money order debt, mortgage debt, pension debt, and lease debt. Here is an explanation of each of the existing accounts on long-term debt. Bond debt bond is a debt statement of the company that issued the bond, another definition of the bond is a long-term debt in writing in the bond contract conducted by the debtor who is obliged to pay the debt with interest (bond issuer) and the party that receives the payment or receivables it has with interest (bondholder) which is generally without guaranteeing an asset. To be able to understand bond accounting, it is necessary to first understand the long-term bill

may increase or decrease due to an increase or decrease in net assets whether derived from non-owner sources (income and expenses) or investments by owners or distributions to owners. This definition presents proprietary theory according to stakeholders who are considered to be the owners of the company. Here are some of the components associated with owner's equity. Comprehensive income changes in equity of an entity during one period from transactions, other events in circumstances from non-owner sources that include all changes in equity during a period except those mentioned by investments by owners or distributions to owners. Distributions to owners reductions in the net assets of the owners of the company caused by the transfer of assets, provision of services/occurrence of liabilities by the entity to the owners and not due to the normal operation of the company's business. Investment by the owner of an increase in the net assets of the owner of the company, as a result of the receipt of something valuable, which will increase ownership in the entity. Income an increase in owner's equity as a result of the normal business activities of an entity such as sales, service income (fees), dividends, royalties and movie rental income and salon service income, sacrificial expenses incurred during the carrying out of normal business activities to obtain income. Incremental gains from net assets from Peripheral / incidental transactions of an entity as well as from other transactions and events and circumstances affecting the entity during the period except those derived from income/investment by the owner. A reduction in net assets from Peripheral/incidental transactions of an entity derived from other

transactions/events/circumstances in a period except those derived from expenses and distributions by owners.

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Lecture Documents Accounting - Obligation

Course: Intro To Accounting (AC 210)

316 Documents
Students shared 316 documents in this course

University: University of Alabama

Was this document helpful?
Obligations
Liabilities are present-day debts of the enterprise arising as a result of past events,
the completion of which is expected to result in an outflow from the enterprise of
resources containing economic benefits. Similarly to assets, debts also have two
main groups. The two types of debt are current debt and long-term debt. The
following will be explained one by one about the definition and understanding of
each debt. Current debts current debts are those obligations that are due in one
year or in one cycle of normal activities of the company. A normal cycle is the
period of time required from the time cash is paid for the purchase of goods or
services needed for production until cash from the sale of the company's products
is received. Debt that is classified as current debt is debt that will be paid off
within a period of one year or the operating cycle of the company. Current debt
can also be defined as liabilities that are expected to be repaid with the company's
wealth classified as current assets or by incurring new current debts. Because debt
involves sacrifices in the future, current debt contains an element of uncertainty.
Based on the level of uncertainty, current debt is divided into: 1) current debt that
can be determined, 2) current debt that is uncertain or conditional (contingent). As
for the groups of current accounts payable, they are as follows: accounts payable
accounts payable are accounts receivable, that is, they are debts derived from the
main activity of the company (credit purchases of goods and services). This
account is usually accompanied by a list of accounts payable containing details by
the name of the creditor. Notes payable notes payable or often referred to as notes

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