The following learning objectives for this chapter map to the curriculum design for our online university-level courses. These courses are offered through Utah State University, and result in the awarding of up to 6 hours of highly transferrable college credit. To learn more, check out the classroom link.

 

The nature and recording of typical current liabilities.

Provide a definition for current liabilities.

What is the operating cycle?

Identify typical current liabilities.

Why is the current portion of long-term debt presented as a current liability, and how are such amounts calculated?

What is an accrued liability?

Why is a customer prepayment shown as a current liability?

Describe the nature and financial statement presentation of collections for third parties.

 

Accounting for notes payable.

Understand the nature of notes and the related interest calculations.

Know key features of borrowing agreements, and how they can impact the cost of borrowing.

Be comfortable with the accounting for notes payable, including notes with interest included in the face value.

Know about truth in lending rules.

 

The criteria for recognition and/or disclosure of contingent liabilities.

What is a contingent liability?

Describe the criteria that apply in accounting for contingencies.

How does timing of events give rise to the recording of contingencies?

Be able to account for warranties.

 

Basic accounting for payroll and payroll related taxes.

What is the significance of the distinction between an employee and an independent contractor?

What is a 1099?

Distinguish between gross pay and net pay.

Identify the nature of social security and Medicare taxes, and understand the calculations related to the rate and base.

How do income taxes and other deductions enter into the calculation of net pay?

Be able to record journal entries for payroll and withholdings.

What is a W-2, and what is a W-4?

In addition to an employee's salary or wages, what other costs must an employer incur related to payroll?

Be able to record the payroll taxes levied on the employer.

Describe the importance of maintaining accurate payroll records.

 

Other components of employee compensation.

What is a compensated absence.

What criteria signal the need to record a liability for a future period of compensated absence.

Be able to describe the appropriate accounting for vacation pay.

Generally, describe the nature of a defined contribution pension plan.

Generally, describe the nature of a defined benefit pension plan.

Generally, describe postretirement health-care benefits and the related accounting consequences.