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Accounting Principles > Chapter 11 > Flashcards

Chapter 11 Flashcards

1
Q

liabilities

A

money owed to creditors

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2
Q

current liabilities

A

payable within 1 year

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3
Q

long term liability

A

paid back over a longer period such as a mortgage

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4
Q

Accounts Payable

A

amounts owed for purchases on acct

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5
Q

Sales Tax Payable

A

collect tax from customer and pay to state later

cash $$

sales revenue $$

Sales tax payable $$

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6
Q

unearned revenues

A

deferred revenues, recorded when revenue is earned.

rcv cash in advance

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7
Q

short term notes payable

A

written promise to pay a debt with interest 1 yr or less

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8
Q

current portion of long term liabilities

A

the current period’s portion of long term liabilities.

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9
Q

Payroll Liability

A

amounts to pay employees wages, salaries, commissions, bonuses, and benefits

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10
Q

wages

A

base rate /hour

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11
Q

overtime

A

a special rate for extra hours

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12
Q

gross pay

A

amount paid before taxes and deductions

total expense to business

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13
Q

net pay

A

take home pay for employee

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14
Q

witholding deductions

A

taxes, insurance, 401K, charitable giving, employee loans

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15
Q

required deductions

A

Fit
sit

sst

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16
Q

optional deductions

A

insurance

retirement

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17
Q

witholding deductions are a

A

liability for companies

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18
Q

income tax witholding

A

tax deducted from gross pay

based on gross pay, allowance, and w4 allowance

19
Q

FICA

A

Federal insurance contribution tax

social security tax

20
Q

fica

A

employer & employee matched

21
Q

OASDI

A

Fica component

Old age Survivorsm and disability insurance

taxed on 1st 118,500 @ 6.2 %

22
Q

Medicare

A

Medical benefits for senior citizens

  1. 45% up to 200k
  2. 35% over 200K
23
Q

Payroll Register

A

a schedule that summarizes the earnings, withholdings, and net pay for each employee

24
Q

https://classconnection.s3.amazonaws.com/846/flashcards/4453846/png/payrollje-14514D9CBEC6EC220F0.png

A

Payroll Journal Entry

25
Q

Payday journal entry

A

Salaries payable $$

Cash

26
Q

employer payroll taxes

A

Employer Fica

matches employee

27
Q

unemployment compensation tax

A

paid by employer to govt on first 7000 per employe

28
Q

SUTA

A

State unemployment taxes 5.4% (varies by state) on first 7k annual earnings

29
Q

FUTA

A

Federal Unemployment Tax Act

.6% on first 7k annual earnings

30
Q

journal entry for employer payroll taxes

A

Payroll liabilities
cash

compound entry

31
Q

controls for efficiency

A

using software to speed up process, calculations are automatic, prints payroll checks

32
Q

controls to safegaurd disbursements

A

photo ID, clock in times, sepration of duties (HR/Payroll/Acctg)
treasurer to disburse

33
Q

Bonus Pay Plans

A

Provide one-time payments based on performance accomplishments

34
Q

estimating bonus liabilities

A

bonus=(bonus% * net income before bonus)/(1+bonus %)

35
Q

estimating liabilities

A

based off history, average industry standards

36
Q

warranty

A

an agreement that guarantees a company’s product against defects

37
Q

warranty expense

A

recorded in the same period as the sale

38
Q

Warranty journal entry

A

https://s3.amazonaws.com/classconnection/142/flashcards/21729142/png/wty-1744B3B33DF2867CEF6.png

39
Q

honor a warranty journal entry

A

https://s3.amazonaws.com/classconnection/142/flashcards/21729142/png/wty-1744B3C642F16934159.png

40
Q

contingent liabilities

A

potential liabilities that depend on a future event

lawsuits for example

41
Q

cosigning a note payable

A

creates a contingent liability based on the other party paying the note payable

42
Q

recording contingent liabilities

A

remote chance
- very little chance

  • no liability recorded
  • no disclosure

reasonable chance

  • 50/50 chance
  • no liability recorded
  • disclose on statements

probable chance

  • likely
  • liability recorded
  • liability added to statements
43
Q

https://classconnection.s3.amazonaws.com/814/flashcards/1869814/png/picture11352746668381.png

A

contingent liability table

44
Q

times interest earned ratio

A

evaluates a business’ ability to pay interest expense

measures # of times earnings before interest and taxes can pay for interest expense

higher is better

= (net income+income tax expense+interest expense)/ interest expense

Accounting Principles (9 decks)

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