Ch.11: Current Liabilities and Payroll Accounting

___________ is the total compensation an employee earns including wages, salaries, commissions, bonuses, and any compensation earned before deductions such as taxes.

- Gross Pay

What are some examples of known liabilities?

- accounts payable, notes payable, payroll, sales taxes, unearned revenues, leases

Give examples of current liabilities

- accounts payable, short-term notes payable, wages payable, warranty liabilities, lease liabilities, taxes payable, unearned revenues

What are known liabilities?

- liabilities with little uncertainty - they are set by agreements, contracts, or laws - also called definitely determinable liabilities

Give examples of long-term liabilities

- long-term notes payable, warranty liabilities, lease liabilities, bonds payable

_______ also called take home pay, is gross pay after all the deductions.

- net pay

What are the 3 crucial factors of a liabililty

1. a past transaction or event 2. a present obligation 3. a future payment of assets or services

T/F: a liability will not be reported if one of the crucial factors are missing

TRUE

We sometimes see liabilities that do not have a fixed due date but instead are payable on the creditor's demand. These are reported as ________________because of the possibility of payment in the near term.

current liabilities

short term liabilities are also called?

current liabilities

A ____________ is a probable future payment of assets or services that a company is presently obligated to make as a result of past transactions or events.

liability

A company's obligation not expected to be paid within the longer of one year or within the company's operating cycle are reported as ___________.

long-term liabilities

A ___________ is a written promise to pay a specified amount on a definite future date within one year or the company's operating cycle, whichever is longer.

short-term note payable