ACCY 1 LS: Chapter 8. Current Liabilities
By law, an employer is required to pay which of the following amounts as payroll taxes.
Medicare contributions federal unemployment tax social security contributions
the following are employer payroll costs
federal and state unemployment taxes employer portion of medicare tax
if a liability is classified as current, rather than non-current, the company's working capital will
decrease
The following are not required payrll withholdings
state unemployment tax charitable contributions federal unemployment tax
Liquidity
refers to a company's cash position and overall ability to obtain cash in the normal course of business
Abbott Corp.'s attorney estimates that the company will ultimately have to pay between $350,000 and $500,000 relating to current litigation, and that the most likely amount of the loss will be equal to $400,000. Abbott Corporation should accrue a contingent liability and loss of
$400,000
Under US GAAP, a contingent liability should
> be reported on the balance sheet if the loss will probably occur and can be reasonably estimated >be in the notes to the financial statements if the loss may possibly occur and can be reasonably estimated >not be reported if the loss is remote and unable to be estimated
the following are current liabilities
Deferred revenues accounts payable taxes payable notes payable due in 3 months wages payable
which of the following are essential characteristics of a liability
a future sacrifice of an economic benefit is probable the obligation results from a past event the future sacrifices arises from a resent obligation
Which of the following represent the correct accounting treatment for loss contingencies that do not meet the criteria for accrual but are at least reasonably possible?
an estimate of the potential loss should be made(if possible) and disclosed. a disclosure mut describe the contingency
an interest rate, unless otherwise specified, is typically a(n)
annual rate
The journal entry to record employer payroll taxes affects
liabilities and stockholders equity
deferred revenue should be classified as a _______ on the balance sheet.
liability
on september 1,2018, Kale Corporation signed a 6-month, 12% interest-bearing promissory note for 100,000. the journal entry required march 1, 2019 at the maturity date which of the following entries?
> debit interest payable $4,000 > debit interest expense $2,000 > credit cash $106,000
on sep 1, abc company borrowed 50,000 on a 6%, 9-month note payable to xyz national bank. the entry abc would record at maturity, assuming all year-end( dec 31) adjusting entries were made correctly, would include a _____
debit to noted payable of 50,000 debit to interest payable of 1,000 credit to cash of 52,250 debit to interest of 1,250
