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

2. 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

3. 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

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

5. 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

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