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Needles Accounting Resource Center Financial & Managerial Accounting , 2002 Edition Belverd E. Needles, Jr., DePaul University Marian Powers, Northwestern University Susan Crosson, Santa Fe Community College Internet Research Activities Chapter 3: Measuring Business Income The Importance of Accrued Expenses Instructions: Visit the five annual reports listed below, or choose others from the Annual Reports list included at this site. Find the section labeled "Current Liabilities" and identify the percentage of current liabilities that are accrued expenses (sometimes called "accrued liabilities"). Five Annual Reports: IBM (12/31/2000) Intel (12/30/2000) Eastman Kodak (12/31/2000) National Semiconductor (5/28/2000) Toys "R" Us (1/29/2000) Sample Current Liabilities Section of an Annual Report (Click here to see the Sun Microsystems balance sheet online.) Current Liabilities 6/30/00 % 6/30/99 % Short-term borrowings $7 0% $2 0% Accounts payable 924 19% 756 23% Accrued payroll-related liabilities 751 16% 520 16% Accrued liabilities and other 1,366 29% 991 31% Deferred revenues and customer deposits 1,289 27% 576 18% Income taxes payable 422 9% 403 12% Total current liabilities $4,759 100% $3,248 100% Extended Research Activities 1. Go to the Notes to Consolidated Financial Statements of Intimate Brands. Describe the types of accrued expenses specified in the notes. Did accrued expenses increase or decrease from 1999 to 2000? 2. Read the article "What Is Your Company Hiding?" (Fool.com–March 22, 2001). Why is it important to know a company's revenue recognition policy? Where in a company's financial statements is its revenue recognition policy discussed? Describe the measures discussed in the article for evaluating accounts receivable. Why should accounts receivable grow at a rate equal to or less than that of revenues? Either print out your answers for submission or email them to your instructor.   Site Map I Partners I Press Releases I Company Home I Contact Us Copyright Houghton Mifflin Company. All Rights Reserved. Terms and Conditions of Use, Privacy Statement, and Trademark Information