Section 2: 30–40%2G
Payables and Accrued Liabilities
Exam insight
Payroll questions are usually straightforward math, pension accounting is where the AICPA turns up the difficulty. The net pension liability or asset on the balance sheet is simply the projected benefit obligation minus plan assets. The trap: candidates try to book the full pension expense as one line, but pieces like prior service cost and actuarial gains/losses run through OCI first, then amortize into income over time.
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What AICPA wants you to know
- 1Classify liabilities as current vs. non-current using the one-year or operating cycle rule
- 2Apply the refinancing exception for short-term debt to be classified as long-term
- 3Record accrued liabilities for wages, interest, warranties, and bonuses
- 4Account for deferred revenue and when it converts to earned revenue
- 5Identify the current portion of long-term debt