Contingent Liability
A potential liability that depends on some future event.
Current Liability
A liability that must be paid with cash or with goods and services within one year.
Current Portion of Notes Payable
The amount of the principal that is payable within one year.
Federal Insurance Contributions Act (FICA)
The federal act that created the Social Security tax that provides retirement, disability and medical benefits.
Gross Pay
The total amount of salary, wages, commissions, and any other employee compensation before taxes and other deductions.
Income Tax Withholding
Income tax deducted from an employee's gross pay.
Long Term Liability
A liability that does not need to be paid within one year.
Net Pay
Gross pay minus all deductions. The amount of compensation that the employee actually takes home.
Liabilities
Debts that are owed to creditors.
Payroll Register
A schedule that summarizes the earnings, withholdings, and net pay for each employee.
Pension Plan
A plan that provides benefits to retired employees.
Times-Interest-Earned Ratio
Evaluates a business' ability to pay interest expense. (Net income + Income tax expense + Interest expense) / Interest expense.
Warranty
An agreement that guarantees a company's product against defects.
Short-Term Note Payable
A written promise made by the business to pay a debt, usually involving interest, within one year or less.
Social Security (FICA) Tax
FICA tax, which is withheld from employees' pay and matched by the employer.
Unemployment Compensation Tax
Payroll tax paid by employers to the government, which uses the cash to pay unemployment benefits to people who are out of work.