Why does it make a difference if liabilities are divided properly between current and long-term liabilities?

  • This should be a substantive response to the topic(s) in your own words, referencing what you have discovered in your required reading and other learning activities.For citation guidelines, please refer to the table in the APA Style section of the syllabus.

DQ1

Pick 3 of the items below and give it your best shot in answering the questions of your choice.

  • Why does it make a difference if liabilities are divided properly between current and long-term liabilities? What is the current operating cycle again, and why can’t we just always use one year?
  • Why is correct payroll calculation so important?
  • Why can’t vacation pay and regular pay be combined?
  • Is the cost of product warranties going up or down now on a company’s books?
  • Are pension benefits going up or down at this time in the economy?
  • Why do we have to record product warranty liability when only a small percentage of goods are ever repaired or replaced?
  • Can’t a company record a large product warranty liability one year in an effort to reduce income and then not record any next year to increase income?
  • How can a company record pension liabilities when it doesn’t know how much an employee will receive or how long an employee will draw the pension? Why can’t a company record the pension as an expense when paid?
  • DQ2
    The organization and structure of an entity is an important decision when considering future financing needs and tax implications. Many companies decide between the C Corporation, S Corporation, and Limited Liability Company form of business.
    Conduct research on these entities and discuss the advantages and disadvantages of each form of entity. Is the company that you currently work for a C Corp, S Corp, or LLC?What are some decisions that impact the decision to form either of these?Has your company or employer switched from one formation to another?If not, conduct research to locate a company that has made this type of switch. What are some of the issues that were faced?

 

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Why does it make a difference if liabilities are divided properly between current and long-term liabilities

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