CURRENT LIABILITY FOB SP -di pa dumating

FOB D -nadeliver na
Current Liability (short-term liability)
 Due to be settled within 12 months after the Measurement of Accounts Payable
balance sheet date
 Handle for trade To Measure Accounts Payable, it should be measured at
 Expected to be settled within Normal operating Invoice Price
cycle of the business
 The entity does not have unconditional right to How to compute “Invoice Price”
defer or postpone settlement of the liabilities for at
List Price (Qouted Price) Pxx Freight
least 12 months
Trade Discounts (xx)
Example: Invoice Price Pxx Cash
Accounts Payable, Notes Payable, Current Maturities of Discounts
Long-Term Debt, Dividends Payable, Returnable Freight
Deposits, Unearned Revenue, Sales Taxes Payable, (+) FOB SP, FP
Property Taxes Payable, Income Taxes Payable, SSS, (-) FOB D, FC
Withholding Taxes and etc.
Cash Discounts
Non-current Liability (Long-Term Liability) Depends on the methods that the company is adapting
 Residual definition of current liability  Gross method –Account payable it is not effected
 Liability not classified as current  Net method -decreases the accounts payable kase
bawas na ang cash discount
Accounts Payable / Trade Accounts Payable
 these are balances owed to others for goods, Cash Discounts Vs. Trade Discounts
supplies, services purchased on account Cash Discounts Trade Discounts

Purchase happens: >Given for >Given to encourage

Ownership of goods are transferred to the buyer prompt/early buyer to buy bulk/large
payments purchase of goods
Scenarios: >Express in terms >Express in terms 20%,
2/10; n/30 15%
1. PURCHASED TRANSACTION

Example:
Goods in Transit (dinideliver palang) from the vendor to
AWP Company, the term is:
a. FOB SP
b. FOB D

Summary: Effects of Freight Charges in Accounts 2% discount is given when paid within 10 days
Payable
Who Who Effect in Accounts Common mistake: pinagsasama ang dicounts like 20%
SHOULD PAID? Payable [Buyer +15% = 35% which is wrong.
pay? Pov] Instead, Get first the 20% then that will be the basis of
FOB SP, FP B S Additional 15%. (LP x 20% = xx, xx-LP x 15% = invoice price)

FOB SP, FC B B No effect

FOB D, FP S S No effect

FOB D, FC S B Deduction