Ch 8
Which of the following voluntary contributions by employees may employers deduct from their employees' pay?
contributions toward retirement funds & union dues
Current maturities of long-term debt should be classified as ____________ liabilities
current
The current portion of long-term debt is the amount that will be paid within the ______ year
next
Common current liabilities include:
deferred revenues, sales tax payable, and the current portion of long-term debt
Sales tax is recorded on the income statement because it is a cost of making a sale
false
The journal entry to record employer payroll taxes affects ______________.
liabilities and stockholders equity
A _______ is a probable further sacrifice of economic benefits arising from present obligations to transfer assets or provide services as a result of past tranaactions or events.
liability
Which of the following is not a current liability?
note payable due in 3 years
Amounts that are subtracted from an employee's gross pay are referred to as ...
payroll withholdings
A liability is a ________ responsibility to sacrifice ___________ in the future due to a transaction or other event that happened in the ___________
present; assets; past
Payroll taxes are paid only by the employer?
FUTA & SUTA
An interest rate, unless otherwise specified, is typically a __________ rate
annual
When an employer withholds items such as charitable contributions from an employee's pay, the employer must record the item as ...
a liability until the amount is paid to the organization
A __________ payable is a short-term liability that occurs when a company purchases goods and does not immediately pay with cash.
account
Withholding taxes for federal and state income tax are based upon which items?
amounts earned by employers & number of exemptions claimed
Which of the following describes the requirement to pay FUTA ...
an employer must pay FUTA even if the employer pays SUTA taxes
Notes payable is classified as a liability that has which of the following effects?
creates interest expense on the income statement
Liabilities are classified as ...
current and long-term
Taxes collected for taxing authorities are recognized as ...
current liabilities
Liabilities that are payable within one year are classified as __________ liabilities, while those payable more than one year from now commonly are classified as ________ liabilities
current; long-term
FICA is the acronym for the ...
federal insurance contribution act
Additional benefits such as health insurance, retirement benefits, or life insurance that are paid by the employer are called ___________ benefits
fringe
Deferred revenue should be classified as a ___________ on the balance sheet
liability
A ___________ of ____________ is an informal agreement that permits a company to borrow up to a prearranged amount without having to follow formal loan procedures
line of credit
Given a choice, most companies will prefer classifying liabilities as ___________.
long-term
An end of period adjusting entry that debits deferred revenue most likely will credit __________ account
revenue
By law, an employee is required to pay which of the following amounts as payroll taxes?
social security contributions, medicare contributions, and federal unemployment tax
Payroll withholdings are ...
the items subtracted from an employee's gross pay to arrive at net pay
