chapter 9 reading

Question 1

liability

Answer 1

probbale future payment of assets or services that a company presently obligated to make as a result of transaction/event

Question 2

current liabilities (short term)

Answer 2

liabilities due in one year ie account payable or wages payable

Question 3

what three questions do liabilities answer

Answer 3

1) who to pay
2) when to pay
3) how much to pay

Question 4

if there is uncertainty do you still report liability?

Answer 4

Yes

Question 5

known liabilities

Answer 5

measurable obligations arising from contracts (ie account payable)

Question 6

account payable

Answer 6

amounts owed to suppliers for products or services purchased on credits

Question 7

unearned revenues

Answer 7

amounts received in advance from customers for future product or service

Question 8

short term not payable

Answer 8

written promise to pay amount on stated future date w/in one year (have interest)

Question 9

gross pay

Answer 9

total employees compensation

Question 10

wages

Answer 10

employees hourly pay

Question 11

net pay

Answer 11

gross pay - deductions

Question 12

payroll deductions

Answer 12

amount withheld from employees’ gross pay (either required or voluntary)

Question 13

what two groups do FICA taxes go into

Answer 13

1) social security
2) medicare

Question 14

social security

Answer 14

withholdings that cover retirement

Question 15

medicare

Answer 15

withholdings thta cover medical benefits

Question 16

payroll internal controls

Answer 16

-employee hiriing
-payroll prep
-timekeeping
-payroll payment

Question 17

estimated liability

Answer 17

known obligation of uncertain amount that can be reasonably estimated (ie pensions, healthcare, vacation pay)

Question 18

contingent liability

Answer 18

potential obligation that depends on future event arising from past transactions or event

Question 19

record liability

Answer 19

future event is likely and amount owed is reasonably estimated

Question 20

discloses in notes

Answer 20

future event could occur

Question 21

no disclosure

Answer 21

future event is unlikely