Ch. 8 Conclusion

Which of the following are employer payroll costs?

Federal and state unemployment taxes Employer portion of Medicare tax

The feature that distinguishes loss _____ from other liabilities is the uncertain outcome.

contingencies

The _____ portion of long-term debt is the amount that will be paid within the next year.

current

The portion of a long-term liability that will be paid within the next year is referred to and reported as the:

current portion of long-term debt

Under GAAP, we do not record contingent _____ until the gain is known with certainty.

gains

An end-of-period adjusting entry that debits Deferred Revenue most likely will credit a(n) ______ account.

revenue

A transaction or event in which the outcome is uncertain is referred to as a(n) _____.

Contingency

Common current liabilities include:

Sales tax payable Deferred revenues The current portion of long-term debt

John Smith works 40 hours for ABC Corp. for $15 per hour. Required payroll deductions are: Social Security $37.20, Medicare $8.70, federal Income tax $58, and state income tax $10. What is John's net pay?

$486.10

Which of the following are payroll withholdings that are subtracted from gross pay to arrive at take-home pay?

Federal income taxes Employee contributions to retirement plans Health insurance paid by the employee

Which of the following are not required payroll withholdings?

Federal unemployment tax (FUTA) State unemployment tax (SUTA) Charitable contributions

ABC Airlines collects $300 for a round-trip ticket from Chicago to Los Angeles and back. How does ABC Airlines record the $300 collected in advance?

A debit to Cash of $300 and a credit to Deferred Revenue of $300.

Which of the following is correct regarding gain contingencies?

They are recorded when the gain is known with certainty.

Payroll withholdings ______. (Select all that apply.)

are amounts subtracted from employees' gross earnings to determine their net pay decrease the amount of cash an employee receives

Gross earnings for the pay period are $100,000. Required payroll deductions are: Social Security $6,700; Medicare $1,450; Federal Income tax $18,000 and State income tax $3,850. What is the net pay to employees?

$70,000