Chapter 10 Terms Flashcards
Accounts payable
Money owed that results from purchase transactions with suppliers. Also known as trade payables.
Breakage
Money paid by a customer for a gift card but never redeemed.
Canada Pension Plan (CPP)
A mandatory federal plan that gives disability, retirement, and death benefits to qualifying Canadians.
Collateral
Property pledged as security for a loan.
Contingency
An existing condition or situation that is uncertain, where it cannot be known if a loss (and a related liability) will result from the situation until one or more future events happen or do not happen.
Contingent liability
A liability whose existence will be confirmed only by the occurrence or non-occurrence of a future event.
Customer loyalty programs
Programs that result in future savings for members on the merchandise or services the company sells.
Determinable liability
A liability whose existence, amount, and timing are known with certainty.
Employee benefits
Payments made by an employer, in addition to wages and salaries, to give pension, insurance, medical, or other benefits to its employees.
Employee earnings record
A separate record of an employee’s gross pay, payroll deductions, and net pay for the calendar year.
Employment Insurance (EI)
A federal mandatory insurance program designed to give income protection for a limited period of time to employees who are temporarily laid off, who are on parental leave, or who lose their jobs.
Gross pay
Total compensation earned by an employee. Also known as gross earnings.
Insurable earnings
Gross earnings used to calculate EI deductions. There is a maximum amount of insurable earnings set each year by the government.
Net pay
Gross pay less payroll deductions.
Notes payable
Obligations in the form of written promissory notes.
Operating line of credit
Pre-authorized approval to borrow money at a bank when it is needed, up to a pre-set limit.
Payroll deductions
Deductions from gross pay to determine the amount of a paycheque.
Payroll register
A record that accumulates the gross pay, deductions, and net pay per employee for each pay period and becomes the documentation for preparing a paycheque for each employee.
Pensionable earnings
Gross earnings less the basic yearly exemption. There is a maximum amount of pensionable earnings set each year by the government.
Personal tax credits
Amounts deducted from an individual’s income taxes determine the amount of income taxes to be withheld.
Prime rate
The interest rate banks charge their best customers.
Product warranties
Promises made by the seller to a buyer to repair or replace a product if it is defective or does not perform as intended.
Provisions
Liabilities of uncertain timing or amount. Also known as estimated liabilities.
