Unearned income is considered a current liability because it is an amount owed to a customer for an amount received for goods or services not provided. In other words, it a payable to customer who gave us cash and is waiting for us provide the goods or services they paid for. These unear...
Current liabilities in accounting In traditional accounting practice, a liability is recorded as a credit under current liabilities on the balance sheet. Liabilities that are expected to be paid back in more than a year are considered long term and are listed further down on the balance sheet. ...
Things such as loans, an accrued interest that is to be paid to a creditor for a financial obligation, are considered regular expenses. The business might be charged interest on it, but it won’t be paid for until the next accounting period. Non-Routine Accrued Liabilities The second type...
What is a good P&L percentage? You may be asking yourself, “what is a good profit margin?” A good margin will vary considerably by industry, but as a general rule of thumb, a 10% net profit margin is considered average, a20% marginis considered high (or “good”), and a 5% ma...
What is considered an A asset? An A asset is an asset that has the lowest risk of default and is the highest quality of asset. Examples of A assets include U.S. Treasury bonds, AAA-rated corporate bonds, and some AAA-rated mortgage-backed securities. What are 4 types of assets? Cash...
including deferred current liabilities. Contingent liabilities are potential liabilities that depend on the outcome of future events. Liabilities can fall into more than one category. For example contingent liabilities can become current or long-term if realized. Below is a more in-depth look at each...
What is considered a good current ratio? Between 1.2 to 2. This means a business has twice more current assets than liabilities to cover its short-term debts. What are the most common liquidity ratios? The current ratio, Quick ratio / Acid test ratio, and Cash ratio. ...
a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the ...
What are two examples of contingent liabilities? Explain why each is considered a contingent liability. Which of the following is not liability? What are some of the responsibilities of the FASB? What is another name for an accrued liability?
Thecurrent ratiois a measure ofliquiditythat compares all of a company’s current assets to its current liabilities. If the ratio of current assets over current liabilities is greater than 1.0, it indicates that the company has enough available to cover its short-term debts and obligations. Why...