Chapter 8
Which of these payroll taxes are paid only by the employer
SUTA FUTA
Which of the following are included in the FICA taxes?
Social security tax and medicare tax
We record interest expense in the period in which we
incur it
What are the two classifications of liabilities?
long term and current
The current portion of long-term debt the amount that will be paid within the next __________ year.
next
Given a choice, most companies will prefer classifying liabilities as
noncurrent
Working capital
the difference between current assets and current liabilities
Payroll withholdings are
the items subtracted from an employee's gross pay to arrive at net pay
Liquidity
Having sufficient cash (or other assets convertible to cash in a relatively short time) to pay currently maturing debts
A company purchases inventory or supplies and promises to pay within 30 to 45 days. No formal agreement is signed. This transaction is recorded as a(n)
accounts payable
Common current liabilities include:
- Deferred Revenues - Sales Tax Payable - Current portion of long-term debt
When a company purchases items form a supplier that if does not immediately pay for with cash, the journal entry required includes a
Credit to accounts payable
Continengente
Uncertain situation that can result in a gain or a loss of a company
Which of the following must employers by law withhold from their employees' pay?
Unemployment taxes FICA amounts
Current ratio
current assets divided by current liabilities
Volker company signs a 3-months, $10,000 note. Stated interest rate is %12 payable at the maturity date. Interest incurred on the note is:
300
contingent liability
An existing uncertain situation that might result in a loss
T/F: current liabilities are always payable within one year
False
Which of the following are examples of fringe benefits provided by employers to their employees?
Reduced o no-cost company-provided services payment of insurance premiums on employees behalf contributions to retirement and other saving accounts
Which of the following are not required payroll withholdings?
State unemployment tax (SUTA) Federal unemployment tax (FUTA) Charitable contributions
Notes payable is classified as a liability that has which of the following effects?
creates interest expense on the income statement
The employer's portion of FICA Tax remitted to the taxing authorities is
The same as the employee
The financial statement where the deferred revenue account is found is the
balance sheet
FICA tax is paid by
both the employee and employer
Taxes collected for taxing authorities are recognized as
current liabilities
A liability present responsibility to sacrifice __________ in the future due to a transaction or other event that happened in the ________.
liability; past
Gladys Company signs an agreement under which Gladys may borrow up to $100,000 at a 6% annual interest rate whenever the company needs cash. This agreement is commonly referred to as a
line of credit
Contingent gain
an existing uncertain situation that might result in a gain
Which of the following obligations is NOT commonly classified as a current liability?
Note payable due in 3 years
Deductions from employee pay for contributions toward retirement saving plans and contributions for charitable organizations are examples of:
Voluntary employee deductions
A(n) ________ payable results from an agreement with a supplier to pay within 30 to 60 days, whereas a(n) _________ payable is a signed contract that promises to pay a specific amount with interest at a specific maturity date.
accounts; notes