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17 Cards in this Set
- Front
- Back
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short term notes payable
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promissory note that must be paid within 1 year.
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sales tax payable
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current liability due to the state within a year
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current portion of notes payable
(current maturity) |
portion of notes payable due within 1 year, 12 months of principle payments, remaining is long term
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unearned/ deferred revenue
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business receives cash prior to providing goods or service.
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warranty payable
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cost of warranty expense is recorded in the same period as revenue is recorded
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warranty expense entry
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estimated %of revenue
debit warr expense credit estimated warr payable |
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contingent liability
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potential, not actual, liability depending on a future event. ex pending law suit
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3 categories of contingent liabilities
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Remote, Reasonably probable, probable and the amount can be reasonably estimated.
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2 main issues in recording cur liabilities
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record in journal, report on balance sheet
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salary expense entry
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debit salary expense, credit salary payable
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salary payment entry
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debit salary payable, credit deductions by payable account and credit cash for take home amount
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recording benefits entry
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debit expenses individually, credit employee benefits payable for total
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employer payroll tax entry
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debit payroll tax expense, credit tax payable by account
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entry for payment of payroll tax to government
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debit tax payable accounts, credit cash
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2 types of payroll internal controls
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controls for efficiency, controls to safeguard payroll disbursements
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controls for efficiency
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use of 2 bank accounts for payroll to limit outstanding checks, direct deposit
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controls to safeguard payroll disbursements
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separation of duties, HR hire and fire, payroll maintains earnings records, accounting records transactions, treasury distributes paychecks
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