Ch. 10: Record a Loan
Debts due within one year or one operating cycle.
What are Current Liabilities?
Tax withheld from employees for Social Security and Medicare.
What is FICA Tax?
Potential liabilities based on a past event.
What are Contingent Liabilities?
How the current portion of long-term debt is classified.
What is a Current Liability?
The liability recorded by an adjusting entry at the end of the period to match the repair or replacement costs of defective products against the current period's sales.
Answer: What is Product Warranty Payable?
Liabilities created by receiving cash before services are performed.
What is Unearned Revenue?
Gross pay minus all deductions and withholdings.
What is Net Pay?
Treatment for a contingency that is "probable" and "estimable. (Journal Entry)
Record in financial statements and accrue the est. amount.
The two components of every installment note payment.
What are Principal and Interest?
Accruing a vacation or warranty expense must follow this accounting principle
Answer: What is the matching principle?
The journal entry to record a note issued for a cash loan.
Dr. Cash;
Cr. Notes Payable
The tax employers must pay for unemployment (FUTA/SUTA).
What is Employer Payroll Tax?
Treatment for a contingency that is "reasonably possible.
"Disclosure Note (Footnotes)
The additional payroll expenses a company must pay beyond the employee's gross earnings, typically including matching FICA taxes and unemployment taxes (FUTA/SUTA)
Answer: What are Employer Payroll Taxes?
The entry to record a note issued for a loan.
What is a Debit Cash
Credit Notes Payable
The journal entry to record the payment of a note at maturity.
Dr. Notes Pay
Int Exp
Cr. Cash
The account debited for the total cost of employer-paid taxes.
What is Payroll Tax Expense?
Treatment for a contingency that is "remote."
What is "No Action"
Additional compensation provided to employees beyond their basic wages or salaries, such as medical insurance, vacation pay, and retirement plan contributions.
A note where the interest is deducted from the face value
Answer: What is a Discounted Note?
How the current portion of long-term debt is classified.
What is a Current Liability?
What is gross Pay?
The journal entry required for a "probable" warranty claim.
Dr. Product Warranty Exp
Cr. Product Warranty Pay
The fringe benefit recorded as an expense in the period it is earned by the employee, creating a liability for the employer until the time off is actually taken.
Answer: What is Vacation Pay?
A defined contribution plan where both employees and employers can make tax-deferred contributions to a retirement fund, which becomes a liability for the employer until paid into the plan.
Answer: What is a 401(k) Plan