Current Liabilities and Contingencies

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Current Liabilities and Contingencies
Current assets are cash or other assets that can reasonably be expected to be converted into cash, sold, or consumed in operations within a single operation cycle or within a year if more than one cycle is completed each year. Current liabilities are obligations whose liquidation is reasonably expected to require use of existing resources properly classified as current assets, or the creation of other liabilities. Accounts Payable or trade accounts payable, are balances owed to others for goods, supplies, or services purchased on open account. Notes Payable are written promises to pay a certain sum of money on a specified future date and may arise from purchases, financing, or other transactions. The portion of bonds, mortgage notes, and other long-term indebtedness that matures within the next fiscal year is reported as a current liability. Short term obligations are those debts that are scheduled to mature within one year after the date of an enterprise's balance sheet or within an enterprise's operation cycle. whichever is longer. A cash dividend payable is an amount owed by a corporation to its stockholders as a result of board of director's authorization. At the date of declaration the corporation assumes a liability that places stockholders in the position of creditors in the amount of dividends declared. Deposits may be received from customers to guarantee performance of a contract or service or as guarantees to cover payment of expected future obligations. Sales taxes on transfers of tangible personal property and on certain services must be collected from customers and remitted to the proper government authority. Amounts owed to employees for salaries or wages at the end of an accounting period are report as a current liability. In addition, the following items related to employee compensation are often reported as current liabilities. Gain contingencies are claims or rights to receive assets whose existence is...
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