Unearned revenue and Short-Term Notes Payable Current Liabilities Unearned revenue and Short-Term Notes Payable

Characteristics of Liabilities Liabilities exist as a result of a past transaction or event represent a present obligation and requires a future payment of cash or services Current liabilities are due within one year or the company’s operating cycle whichever is longer Liabilities can be Known Estimated Or Contingent

Known Liability – Unearned Revenue (AJE) When a client pays cash in advance to a company for future products or services such as NFL teams, concerts, legal retainers Once trial has begun and some of the services rendered

Known Liability – Notes Payable – Calculate Note Maturity Date Use calendar year to calculate maturity date or number of days until financial statement date

Known Liability – Short Term Notes Payable Same as Notes Receivable but these journal entries would be on the books of the entity that owes the money

Known Liability – Short Term Notes Payable When the due date of the note straddles the financial statement date