Payables and Accrued Liabilities

Question 1

125. How are deferred tax assets and liabilities reported on the balance sheet?

Answer 1

Noncurrent. All deferred tax assets and liabilities are reported as noncurrent.

Question 2

126. Where are officers bonuses accounted for?

Answer 2

Compensation Expense

Question 3

126. When do dividends become liabilities on the b/s?

Answer 3

when they are declared

Question 4

126. Name who pays (employer, employee or both) for each payroll liability category:

• FICA
• FUTA
• SUTA

Answer 4

• FICA - employee and employer
• FUTA & SUTA - employer only

NOTE: FICA, FUTA, and SUTA all have salary limits beyond which no more tax is levied either for employer or employee (there is no limit for Medicare) for a particular year

Question 5

128. Are sick benefits accrued or not?

Answer 5

Sick benefits need not be accrued because the event causing the payment (sickness) cannot be predicted.

BUT if sick pay benefits are routinely paid out then accrual is required because the benefits vest.