liability
is a present obligation that grew out of a past event and will require a future sacrifice to extinguish the obligation.
Current liabilities
________liabilities are expected to be paid within one year or the normal operating cycle of the company' whichever is longer.
Long-term liabilities
________ liabilities are not expected to be paid or extinguished within one year.
accounts payable, sales tax liabilities, unearned revenues, short-term notes payable, payroll liabilities, multi-period known liabilities
determinable liabilities
Cash DB
Sales CR
Sales Payable CR
sales taxes payable JE
note payable
is a written promise to pay a specific amount at a definite future date. They normally bear interest.
Accounts Payable DB
Notes Payable CR
note payable JE establishment
Cash CR
Notes Payable DB
Interest Expense DB
note payable JE pay back
promissory note
is issued to borrow money from the bank.
Cash DB
Notes Payable CR
End-of-Period Adjustment to Notes JE - issuance of note
Interest Payable CR
Interest Expense DB
End-of-Period Adjustment to Notes JE - adjustment at year end
Notes Payable DB
Interest Expense DB
Interest Payable DB
Cash CR
End-of-Period Adjustment to Notes JE - note falls due' and is paid in full
payroll liabilities
are costs to your employer.
Gross pay
is the amount you actually earn during a pay period
Gross pay deductions
amounts are withheld for social security (FICA) taxes' Medicare taxes' and federal income taxes, (state and local income taxes), voluntary deductions
net pay
Your gross pay less all withholdings' mandatory and voluntary' is your ______. This is the amount of cash you can put in the bank.
federal and state unemployment taxes.
our employer must pay all __________ and ________ taxes.
payroll tax expense DB
FICA SS CR
FICA Medicare CR
FUTA CR
SUTA CR
record the payroll tax expenses paid by employers
Salaries Expense DB
FICA SS CR
FICA Medicare CR
Federal Income tax CR
Accrued Salaries Payable CR
payroll entry to record the employees' withholdings and net pay
subscriptions and long-term notes payable
Two common multi-period liabilities include _______and ____________ that have a portion maturing each year.
warranty liabilities
Many products sold are covered by a ______. The seller is liable for replacing or repairing the product while it is under ______.
warranty expense DB
estimated warranty liability CR
warranty liabilities JE - date of sale
estimated warranty liability DB
Inventory CR
Salaries Payable CR
warranty liabilities JE - has to fix something on item sold with warranty
cost x historical warranty cost %
The amount of the estimated liability is determined by _____
contingent liability
is a potential liability whose outcome depends upon the occurrence of some future event.
no action
remote contingent liability
Disclose the liability in the notes to the financial statements
reasonably possible contingent liability
record the contingent liability
probable contingent liability that can be estimated
Disclose the liability in the notes to the financial statements
probable contingent liability that cannot be estimated
Times Interest Earned ratio
is a measure that helps creditors assess the risk of a loan
income before interest and income taxes / interest expense
Times Interest Earned ratio (the higher the lower the risk of nonpayment)
Income before interest and income taxes
#NAME?