Chapter 9 key terms and definitions

Question 1

What are contingent Liabilities?

Answer 1

Obligations to make a future payment if, and oliy if, an uncertain future event occurs.

Question 2

What are current liabilities?

Answer 2

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

Question 3

Whar is the current portion of long term debt?

Answer 3

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

Question 4

What is deferred income tax liability?

Answer 4

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

Question 5

What are employee benefits?

Answer 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.

Question 6

What is an employees earnings report?

Answer 6

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

Question 7

What is an estimated liability?

Answer 7

Obligation of an uncertain amount that can be reasonably estimated.

Question 8

What is a federal depository bank?

Answer 8

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

Question 9

What is the federal insurance contributions act Taxes?

Answer 9

Taxes assessed on both employers and employees; for social securtiy and medicare programs.

Question 10

What is Federal unemployment Taxes?

Answer 10

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

Question 11

What is form 940?

Answer 11

IRS form used to report an employers federal unemployment taxes FUTA on an annual filing basis.

Question 12

What is form 941?

Answer 12

IRS form filed to report FICA taxes owed and remitted.

Question 13

What is form W-2?

Answer 13

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

Question 14

What is Form W-4?

Answer 14

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

Question 15

What is gross pay?

Answer 15

Total compensation earned by an employee

Question 16

What is a known Liability?

Answer 16

Obligation of a company with little uncertainty; set by agreements, contracts, or laws; also called definitely determinable liabilities.

Question 17

What are long term liabilities?

Answer 17

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

Question 18

What is merit rating?

Answer 18

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

Question 19

What is net pay?

Answer 19

Gross pay less all deductions; also called take home pay.

Question 20

What is a payroll bank account?

Answer 20

Bank account usedsolely for paying emplyees; each pay period an amount equal to the total empoyees net pay is deposited in it and the payroll checks are drawn on it.

Question 21

What are payroll deductiions?

Answer 21

Amounts withheld from an employees gross pay; also called withholdings.

Question 22

What is a payroll register/

Answer 22

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

Question 23

What are short term note payable?

Answer 23

Current obligation in the form of a written promissory note.

Question 24

What are state unemployment taxes?

Answer 24

State payroll taxes on employers to dsupport its unemployment programs.

Question 25

What is times interest earned?

Answer 25

Ratio of income before interest expense divided by interest expense; reflects risk of covering interest commitments when income varies.

Question 26

What is the wage bracket withholding table?

Answer 26

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

Question 27

What is a warranty?

Answer 27

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