Chapter 9

Question 1

Obligation to make a future payment if, and only if, an uncertain future event occurs.

Answer 1

CONTINGENT LIABILITY

Question 2

Obligations due to be paid or settled within one year or the company’s operating cycle, whichever is longer.

Answer 2

CURRENT LIABILITIES

Question 3

Portion of long-term debt due within one year or the operating cycle, whichever is longer; reported under current liabilities.

Answer 3

CURRENT PORTION OF LONG-TERM DEBT

Question 4

Corporation income taxes that are deferred until future years because of temporary differences between GAAP and tax rules.

Answer 4

DEFERRED INCOME TAX LIABILITY

Question 5

Additional compensation paid to or on behalf of employees, such as premiums for medical, dental, life, and disability insurance, and contributions to pension plans.

Answer 5

EMPLOYEE BENEFITS

Question 6

Record of an employee’s net pay, gross pay, deductions, and year-to-date payroll information.

Answer 6

EMPLOYEE EARNINGS REPORT

Question 7

Obligation of an uncertain amount that can be reasonably estimated.

Answer 7

ESTIMATED LIABILITY

Question 8

Bank authorized to accept deposits of amounts payable to the federal government.

Answer 8

FEDERAL DEPOSITORY BANK

Question 9

Taxes assessed on both employers and employees; for Social Security and Medicare programs.

Answer 9

FEDERAL INSURANCE CONTRIBUTIONS ACT (FICA) TAXES

Question 10

Payroll taxes on employers assessed by the federal government to support its unemployment insurance program.

Answer 10

FEDERAL UNEMPLOYMENT TAXES (FUTA)

Question 11

IRS form used to report an employer’s federal unemployment taxes (FUTA) on an annual filing basis.

Answer 11

FORM 940

Question 12

IRS form filed to report FICA taxes owed and remitted.

Answer 12

FORM 941

Question 13

Annual report by an employer to each employee showing the employee’s wages subject to FICA and federal income taxes along with amounts withheld.

Answer 13

FORM W-2

Question 14

Withholding allowance certificate, filed with the employer, identifying the number of withholding allowances claimed.

Answer 14

FORM W-4

Question 15

Total compensation earned by an employee

Answer 15

GROSS PAY

Question 16

Obligations of a company with little uncertainty; set by agreements, contracts, or laws; also called DEFINITELY DETERMINABLE LIABILITIES.

Answer 16

KNOWN LIABILITIES

Question 17

Obligations not due to be paid within one year or the operating cycle, whichever is longer.

Answer 17

LONG-TERM LIABILITIES

Question 18

Rating assigned to an employer by a state based on the employer’s record of employment.

Answer 18

MERIT RATING

Question 19

Gross pay less all deductions; also called TAKE-HOME PAY.

Answer 19

NET PAY

Question 20

Bank account used solely for paying employees; each pay period an amount equal to the total employees’ net pay is deposited in it and the payroll checks are drawn on it.

Answer 20

PAYROLL BANK ACCOUNT

Question 21

Amounts withheld from an employee’s gross pay; also called WITHHOLDINGS.

Answer 21

PAYROLL DEDUCTIONS

Question 22

Record for a pay period that shows the pay period dates, regular and overtime hours worked, gross pay, net pay, and deductions.

Answer 22

PAYROLL REGISTER

Question 23

Current obligation in the form of a written promissory note.

Answer 23

SHORT-TERM NOTE PAYABLE

Question 24

State payroll taxes on employers to support its unemployment programs.

Answer 24

STATE UNEMPLOYMENT TAXES (SUTA)

Question 25

Ratio of income before interest expense (and any income taxes) divided by interest expense; reflects risk of covering interest commitments when income varies.

Answer 25

TIMES INTEREST EARNED

income before interest expense & income tax expense / interest expense

Question 26

Table of the amounts of income tax withheld from employees’ wages.

Answer 26

WAGE BRACKET WITHHOLDING TABLE

Question 27

Agreement that obligates the seller to correct or replace a product or service when it fails to perform properly within a specified period.

Answer 27

WARRANTY