Chapter 11 Flashcards
Obligation to make a future payment if, and only if, an uncertain future event occurs.
Contingent liability
Obligations due to be paid or settled within one year or the company’s operating cycle, whichever is longer.
Current liabilities
Portion of long-term debt due within one year or the operating cycle, whichever is longer; reported under current liabilities.
Current portion of long-term debt
Taxes assessed on both employers and employees; for Social Security and Medicare programs.
Federal Insurance Contributions Act (FICA) taxes
Payroll taxes on employers assessed by the federal government to support its unemployment insurance program.
Federal Unemployment Tax Act (FUTA)
Total compensation earned by an employee.
Gross pay
Obligations of a company with little uncertainty; set by agreements, contracts, or laws; also called definitely determinable liabilities.
Known liabilities
Obligations not due to be paid within one year or the operating cycle, whichever is longer.
Long-term liabilities
Rating assigned to an employer by a state based on the employer’s record of employment.
Merit rating
Gross pay less all deductions; also called take-home pay.
Net pay
Current obligation in the form of a written promissory note.
Short-term note payable
Table of the amounts of income tax withheld from employees’ wages.
Wage bracket withholding table
Agreement that obligates the seller to correct or replace a product or service when it fails to perform properly within a specified period.
Warranty
Employee-claimed exemptions on the tax form employers use to determine how much of an employee’s pay to subtract from his or her paycheck to remit to the tax authorities.
Withholding Allowance
