Tonya Badano
ACC 205 Principles of Accounting I
Mark Stricklett
November 7, 2011
In account statement it is essential to prepare pecuniary statements with data founded on accrual based accounting concepts and principles. Faithfully documenting each knowledge base of the accounting equations, assets equal liabilities plus equity, is the foundation of all monetary statements. In the following paper I ordain address one area of the accounting equation liabilities, specifically trus twainrthy liabilities known, as well as estimated and item liabilities. With regards to liabilities, I will show how its accuracy is important to the relationship in the financial health of the company. I will also touch on some general differences between the generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS) regarding the rules governing incumbent liabilities and contingencies. I will protrude with the accounting of each type of the twain elementary categories of current liability followed by the three categories of contingent liabilities. Next I will review the U.S.
GAAP measure IFRS rules governing them and finally the importance of the financial statements legitimacy derived from these liabilities on the financial statements to determine the companys risk factor.
To begin with, liabilities are classified or divided into one of two classifications, current or long-term. We will focus on current liabilities which are defined in our text as debts that must be paid either with cash or with goods and run within one year, or within the entitys operating unit of ammunition if the cycle is longer than a year (Horngren, Harrison, Oliver, 2011, p. 211). The two basic categories of current liabilities are those of known amounts and those of estimated amounts and are listed on the relief sheet in order of which they must be paid. Current liabilities of known amounts are as follows; accounts payable, short-term notes...If you want to maturate a full essay, order it on our website: Ordercustompaper.com
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