Class Notes Ch 10 Flashcards
what are liabilities
present obligations to transfer economic resources as a result of from past transactions
two types of liabilites
current anad non current
two genres of liabilities
1) financial liabilities
2) non financial liabilities
Financial Liablity
contractual obligations to pay cash in the future! they need cash to address
what are non financial liablities
this obligation is settled by the provision of goods/service in the future
EX: DEFFERED REVENUE!
JE: DRcash
CR Defferred rev
Dr Deferred rev
Cr service revenue
another name of deffered revenue
custoemr deposits
what are current liabliites
expected to be paid or settled within one year of the data on the sofp or within the operating cycle
<1 year
can current liablities be financial and non financial
yes!!!
how can current liabliites be paid (3 ways)
1) paid throguh cash
2) paid through the transfer of goods and services
3) paid through trannsferring it to a new liablitiy (note payable)
types of current liabilities
-bank indebtedness
-a/p and accrued liabilities
-refund liabilitiy
-def rev
-sales and taxes
-payroll
-note paayable
-current portion of bank loand and mortgage
how do we record sales tax JE
Dr Cash
Cr Sales
Cr Sales Tax Payable
When you see the cash flows diagram
you need to account for how much cash has changed in terms of the accounting equation AT THE TIME OF SALE
Is sales tax payable included in sale price
may or may not be
how to calculate the sales portion if included in sale price
divide the cash received by 100% plus the sales tax percentage
Total Receipts / (1+ Tax Rate) =Sales REVENUE
WHO IS SALES TAX REMITTED TO
-what is JE for remittance
THE APPROPRIATE PARTY! government gets gst and province gets hst
sales tax payable
cash
what is gross pay
what are payroll deductions
what is net pay
the total amount owed to employees
money withheld from gross pay
gross- payroll deductions= net pay
bonds are the hardset part!!
what are some mandatory employee payroll deductions
1) federal and provincial income tax
2) cpp
3) ei or ui (employment insurance/unemployed insurance)
what are some volunaty employee payroll deductions
health and pensions
union dues
chartiable donations
how do you record employee payroll deducations IN A JE
DR Salaries Expense
Cr CPP payable
Cr EI payable
Cr Employment IT payable
Cr United way payable
Cr Union dues payable
Cr salaries payable
(to record salaries and employee deductions for the week ending march 15)
are payroll deductions on behalf of the company or employees
both!!!!!
what are EMPLOYER PAYROLL LIABILTIEIS
1)employers share of cpp and ei
2) contribution to workers comp
3) employees benefits (compensated absence, employer sposored health plans and pension)
JE for employer payroll liability
also, is this an accrual entry?
Dr Employee benefits expense
Cr CPP payable
Cr EI payable
CR workers comp payable
CR health insurance benfits payable
(to record employers payroll costs for the week ending march 15)
YES
what is the JE when all the payables are paid
Dr CPP payable (both employer+ employee)
Dr EI payable (both employer+ employee)
DR workers comp payable
DR health insurance benfits payable
Cr Cash