Business Accounting: Accounting for Liabilities

Audience

Managers or employees interested in learning the basics of accounting and accounting processes.

Objective

• Identify types of current liabilities.
• Recognize ways longterm liabilities are reported on financial statements.
• Identify the equation used to calculate the value of a cash flow that uses compound interest.
• Calculate the future value of a cash flow.
• Calculate the present value of an ordinary annuity.
• Calculate the future value of an annuity due.
• Calculate the interest rate given a cash flow equation.
• Calculate the maturity date given a cash flow equation.
• Calculate the value of a bond.

Topics Include

Unit 1: Current Liabilities

• Calculate a current ratio.
• Identify types of current liabilities.
• Identify types of accrued liabilities.
• Identify the process for accounting for current maturities of long-term debt.
• Identify two ways an organization can account for contingent liabilities.
• Simulation Overview:
• In this simulation you will meet with Ronald Spear a Senior Accounting Auditor in Icon's Financial Services Division. Ronald works with current liabilities on a daily basis and has a number of years of experience. He has prepared a series of exercises that will test your knowledge of this topic. Through your discussion with Ronald you will increase your understanding of liability fundamentals as well as the accounting process that should be used when calculating the obligations and debt of a business.

Unit 2: Long-term Liabilities

• Recognize ways long-term liabilities are reported on financial statements
• Differentiate between the two types of leases
• Differentiate between the two types of pension obligations
• Identify factors that affect a bond's price
• Differentiate between premium and discount bonds
• Simulation Overview:
• In this simulation you will meet with Maggie Roberts one of Icon's Corporate Controllers in the Financial Services Division. As a Corporate Controller Maggie is familiar with long-term liabilities. Today she is going to ask you a series of questions designed to test your knowledge of this topic. During your meeting with Maggie you will improve your understanding of how long-term liabilities are reported on financial statements. You will also review the difference between the two types of leases and the difference between premium and discount bonds.

Unit 3: Time Value of Money

• Identify the equation used to calculate the value of a cash flow that uses compound interest.
• Identify the equation used to calculate the future value of a cash flow.
• Calculate the future and present value of a cash flow.
• Calculate the future value of an ordinary annuity.
• Identify the equation used to calculate the present value of an ordinary annuity.
• Calculate the present value of an ordinary annuity.
• Identify the equation used to calculate the future value of an annuity due.
• Calculate the future and present value of an annuity due.
• Identify the variables needed to calculate the interest rate given a cash flow equation.
• Calculate the interest rate and maturity date given a cash flow equation.
• Calculate the value of a bond.
• Simulation Overview:
• In this simulation you will meet with John Cunningham the Vice President of Finance in Icon's Financial Services Division. John has agreed to meet with you to discuss the time value of money. He has prepared a series of exercises to test your knowledge of this accounting subject. Through his questions and your answers you will gain a better understanding of time value of money fundamentals. Also you will be expected to perform a variety of calculations relating to the time value of money as well as interest rates and maturity dates.

Duration

4

Minimum Requirements

The CDROM version of this course requires:

• At least a 486DX 33Mhz CPU.
• Microsoft Windows 3.1 or higher and a Microsoft compatible mouse.
• At least 8MB RAM.
• At least VGA graphics capability with a minimum 512K video RAM (1MB video RAM recommended).
• At least a double speed CDROM drive.
• An MPC compliant sound card with attached speakers or headphones is recommended (Currently only the CDROM version supports audio).

• At least a 486DX 33Mhz CPU.
• Microsoft Windows 3.1 or higher and a Microsoft compatible mouse.
• At least 8MB RAM and 22MB available hard disk space or file server space.
• At least VGA graphics capability with a minimum 512K video RAM (1MB video RAM recommended).

Media