Principles Of Accounting - Chapter 11 Terms

Front 1

Employee Compensation

Back 1

A major expense. Also called payroll.

Front 2

Federal Insurance Contributions Act (FICA) Tax

Back 2

Federal Insurance Contributions Act (FICA) tax, which is withheld from employees' pay and matched by the employer. Also called Social Security tax.

Front 3

Gross Pay

Back 3

Total amount of salary, wages, commissions, or any other employee compensation before taxes and other deductions.

Front 4

Net (Take-Home) Pay

Back 4

Gross pay minus all deductions. The amount of compensation that the employee actually takes home.

Front 5

Payroll

Back 5

A major expense. Also called employee compensation.

Front 6

Social Security (FICA) Tax

Back 6

Federal Insurance Contributions Act (FICA) tax, which is withheld from employees' pay and matched by the employer. Also called FICA tax.

Front 7

Unemployment Compensation Tax

Back 7

Payroll tax paid by employers to the government, which uses the money to pay unemployment benefits to people who are out of work.

Front 8

Withheld Income Tax

Back 8

Income tax deducted from employees' gross pay.

Front 9

Accrued expense

Back 9

An expense that the business has incurred but not yet paid; also called accrued liability.

Front 10

Accrued liability

Back 10

An expense that the business has incurred but not yet paid; also called accrued expense.

Front 11

Bonus

Back 11

Pay for exceptional performance over and above the base salary, wage, or commission.

Front 12

Commission

Back 12

Pay stated as percentage of a sales amount.

Front 13

Contingent liability

Back 13

A potential liability that is dependent on a future event.

Front 14

Cosign

Back 14

To sign a note payable with the borrower on behalf of the borrower; if the borrower fails to pay, the cosigner is responsible for paying the principal and interest of the note.

Front 15

Current portion of long-term notes payable

Back 15

Amount of the principal that is payable within one year and must be shown as a current liability.

Front 16

Current ratio

Back 16

The ratio of current assets to current liabilities; a key measure of liquidity.

Front 17

Deductions

Back 17

Amounts withheld from employees' gross pay.

Front 18

Employee compensation

Back 18

A major expense of businesses with employees; also called payroll.

Front 19

Employee earnings record

Back 19

Payroll record that contains the pay information of an employee.

Front 20

Fair Labor Standards Act

Back 20

Federal law that regulates overtime pay.

Front 21

Federal Insurance Contributions Act (FICA)

Back 21

Federal law that created the social security tax as well as the unemployment tax; also called the Social Security Act.

Front 22

Federal unemployment tax (FUTA)

Back 22

Federal tax, paid by employers, that provides unemployment compensation.

Front 23

Form W-2, Wage and Tax Statement

Back 23

Internal Revenue Service form prepared by employers used to report employee earnings and withholdings for a calendar year.

Front 24

Form W-4, Employee's Withholding Allowance Certificate

Back 24

Internal Revenue Service form completed by employees upon hire to report marital status and withholding allowances.

Front 25

Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return

Back 25

Internal Revenue Service form prepared by employers annually to report earnings subject to unemployment tax and the amount of the unemployment tax on those earnings.

Front 26

Form 940, Employer's Quarterly Federal Tax Return

Back 26

Internal Revenue Service form prepared by employers quarterly to report employee compensation, the amount of federal income tax withheld, and FICA taxes owed on compensation.

Front 27

Gross pay

Back 27

Total amount of salary, wages, commission, bonus or any other employee compensation before taxes and other deductions.

Front 28

Income tax withheld

Back 28

Amount of income tax deducted from gross pay.

Front 29

Net pay

Back 29

Gross pay minus all deductions; also called take-home pay.

Front 30

Payroll

Back 30

A major expense of business with employees; also called employee compensation.

Front 31

Payroll register

Back 31

Payroll record that contains information about a pay period.

Front 32

Salary

Back 32

A set amount of pay for a period of time such as a year, month, or week.

Front 33

Social Security Act

Back 33

Federal law that created the social security tax as well as the unemployment tax; also called the Federal Insurance Contributions Act (FICA).

Front 34

Social security tax

Back 34

Federal Insurance Contributions Act (FICA) tax, which is withheld from employees' pay and paid by the employer.

Front 35

State unemployment tax (SUTA)

Back 35

State tax, mandated by the federal government and paid by employers, that provides unemployment compensation.

Front 36

Take-home pay

Back 36

Gross pay minus all deductions; also called net pay.

Front 37

Wage

Back 37

A pay amount stated at an hourly rate.

Front 38

Warranty expense

Back 38

Expense of selling a product with a warrant that guarantees the product against defects.

Front 39

Withholding allowances

Back 39

Allowances claimed for self, spouse, and dependents, which reduce the amount of income tax withheld from gross pay.

Front 40

Working capital

Back 40

The excess of current assets over current liabilities; a key measure of liquidity.