会计英语-第6章-Liabilities-and-Owner’s-Equity课件.pptx

1、6.1 6.1 Current LiabilitiesCurrent Liabilities6.1.1 Definition of Current LiabilitiesCurrent liabilities are those obligations that are reasonably expected to be paid by using current assets or by creating other current liabilities.Current liabilities can be accounts payable,short-term notes payable

2、,unearned revenue,short-term borrowings,accrued liabilities,dividends payable,the current portion of long-term debt,and so on.Accounts payable usually refers to the amount due for the purchase of materials by a manufacturing company or merchandises by a merchandising company.Accounts payable are usu

3、ally not recorded when purchase orders are placed,but when legal right to the goods passes to the buyer.If goods are in transit at the year end,the purchase also should be recorded if the shipment terms indicate that the ownership of goods has been passed.Short-term notes payable are obligations in

4、the form of written promissory notes.Short-term notes payable may be either interest-bearing or non-interest-bearing.In theory,short-term notes payable should be recorded at the present value of the cash outflows associated with the note.Short-term notes payable are obligations in the form of writte

5、n promissory notes.Short-term notes payable may be either interest-bearing or non-interest-bearing.In theory,short-term notes payable should be recorded at the present value of the cash outflows associated with the note.Short-term borrowings usually arise from cash borrowings and are generally payab

6、le to banks or loan companies.It is from financing activity Its repayment period is usually between thirty days to one year.At the maturity date,the borrowing company repays the principal as well as the interest subordinated to the principal.Accrued liabilities arise from the recognition of expenses

7、 to be paid in a future period.It is also called accrued expenses.Examples of accrued liabilities include taxes payable,interest payable,and employee compensation payable.1.Taxes Payable Show the amount that the entity owes government offices for taxes.2.Interest Payable Cost of borrowing and increa

8、ses with the passage of time.3.Employee Compensation Payable Every business incurs a number of accrued liabilities relating to payroll.The largest of these liabilities is the obligation to pay employees for their services rendered during the period.Dividend payable is a liability that is created whe

9、n the board of directors of a corporation declares to pay dividends to its stockholders.It is listed as a current liability because dividends are usually paid within several weeks of declaration.Some long-term debt are payable in a series of monthly or quarterly installments.In these cases,the long-

10、term debt will be firstly listed as one of the non-current liabilities in the balance sheet when it incurs.Then as its maturity date approaches,the portion due within one year or one operating cycle will be listed as a current liability,and the remainder of it will still be a non-current liability.N

11、on-current liabilities,also called Long-term liabilities,are liabilities with a future benefit and will be mature in over one year.In accounting,the long-term liabilities are shown on the right side of the balance-sheet representing the sources of long-term funds.Examples of non-current liabilities

12、are long-term borrowings,bonds payable,long-term notes payable,pension plan and other non-current liabilities.Long-term borrowings are generally payable to banks or loan companies,but its repayment period is longer than one year or one operating cycle.It is also related to the financing activity in

13、cash flow statement.The issuance of bonds payable is the equivalent of splitting a large loan into a great many of unit,which is called bond.Each bond is essentially a long-term interest-bearing note payable.There are many different types of bonds,such as mortgage bonds,debenture bonds,convertible b

14、onds,callable bonds,registered bonds,coupon bonds,etc.Long-term notes payable is similar to short-term notes payable except that its repayment period exceeds one year or one operating cycle.A long-term note may be secured by a mortgage that pledge title to specific assets to secure the note.A pensio

15、n plan is a contract between a company and its employees under which the company agrees to pay retirement benefits to eligible employees.As pension obligation accrues,the company could record them by a debit to Pension Expense account and a credit to cash account.If all required payments are made pr

16、omptly to the pension fund trustee,no liability needs to be represented in the financial statements.There are three typical types of organizations:Sole Proprietorship Partnership corporationA sole proprietorship,also known as a sole trader or a proprietorship,is a type of business entity that is own

17、ed and ran by a natural person.There is no legal distinction between its owner and the business.Advantages of a sole proprietorship(1)It is easy to create.When create a sole proprietorship,there is no need to negotiate with others or to be agreed by them and there is no need of too much registered c

18、apital either.(2)The fixed cost to maintain a sole proprietorship is relatively low.(3)No need to pay corporate income tax.Disadvantages of a sole proprietorship(1)The owner takes unlimited responsibility for all its losses and debts and then bears a big risk.(2)The existence of a sole proprietorshi

19、p is influenced by the life of its owner.(3)It is hard to gain a lot of money for daily operatingA partnership is an arrangement where two or more parties,known as partners,agree to cooperate to advance their mutual interests.Partners in a partnership may be individuals,firms,profit-making organizat

20、ions,schools,government offices or their combinations.A partnership may issue and holding equity or be governed only by a contract.It can be subdivided into ordinary partnership and limited liability partnership.A corporation can be defined as an“artificial person”,which is invisible,intangible and

21、created by law with an independent legal personality and a perpetual existence.Corporation is the main form of modern companies and its two typical subcategories are limited liability corporations and incorporated corporations.Owners equity is the residual interest in the assets of an entity after r

22、educing its liability.Stockholders equity is normally the term used to present owners equity for a business organized in the form of a corporation.Equity presents only residual claims to net assets,after all liabilities have been fully satisfied.Stockholders are the owner of a company.The ownership

23、of a corporation can be divided into capital stock，capital reserve and retained earnings.Capital stock is the amount of shares authorized for issuance by the corporations charter,including both common stock and preferred stock.The interest of stockholder is determined by the number of shares held by

24、 him or her.The basic rights of common stock:(1)Voting right(2)Dividend and liquidation participation right(3)First refusal rightThe basic rights of preferred stock:(1)Preference to dividends(2)Preference to assetsRetained earnings are net income that a company retains in the business.The balance of

25、 retained earnings is part of the stockholders claim on the total assets of the corporation.A dividend is a distribution by a corporation to its stockholders on a pro rata basis.In practice,the two predominating forms of dividends are cash dividend and stock dividend.Cash dividend Cash dividend is a

26、 pro rata distribution of cash to stockholders.Stock Stock dividend dividend is a distribution of the corporations own stock to stockholders.accounts payable 应付账款short-term borrowings 短期借款current portion of long-term debt 长期负债的当期部分interest payable 应付利息employee compensation payable 应付职工薪酬mortgage loa

27、ns 抵押借款long-term borrowings 长期借款bonds payable 应付债券pension plan 退休金计划mortgage bond 抵押债券debenture bond 信用债券，无担保债券convertible bond 可转化债券callable bond 可赎回债券registered bond 记名债券coupon bond 息票债券，不记名债券credit rating 信用等级评定contractual interest rate 票面利率market interest rate 市场利率sole proprietorship 独资企业ordinary partnership 普通合伙limited liability partnership 有限责任合伙limited liability corporation 有限责任公司incorporated corporation 股份有限公司liquidation participation right 参与清算权first refusal right 优先购买权cash dividend 现金股利stock dividend 股票股利