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15 Cards in this Set
- Front
- Back
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Liabilities |
Debts that are owed to creditors. |
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Current liabilities |
Liability that must be paid with cash or with goods and services within one year or within the entities operating cycle of the cycle is longer than one year. |
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Long-term liability |
A liability that does not need to be paid within one year or within the entities operating cycle, whichever is longer. |
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Short term note payable |
A written promise made by the business to pay a debt, usually involving interest, within one year or less. |
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Gross pay |
The total amount of salary, wages, commissions, and any other employee compensation before taxes and other deductions. |
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Net pay |
Gross pay minus all deductions. The amount of compensation that the employee actually takes home. |
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Income tax withholding |
Income tax deducted from an employee's gross pay. |
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Federal Insurance contributions Act (FICA) |
The federal act that created the Social Security tax the provides retirement, disability, and medical benefits. |
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Social security tax (FICA) |
Federal Insurance contributions Act tax, which is withheld from the employees pay and matched by the employer. |
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Payroll register |
A schedule that summarizes the earnings, withholdings, and net pay for each employee. |
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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. |
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Pension plan |
A plan that provides benefits to retired employees. |
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Warranty |
An agreement that guarantees a company's product against defects. |
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Contingent liability |
A potential liability that depends on some future event. |
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Times interest earned ratio |
Evaluate the businesses ability to pay interest expense. (net income + income tax expense + interest expense) / Interest Expense. |
