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chapter 12
Current Liabilities
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Select the appropriate response.
An example of an accrued liability is:
salaries payable or the current portion of long-term debt
Collections for third parties should be recorded as a current liability.
Which of the following would not be a typical current liability?
prepayments (advances) to suppliers or amounts collected for and payable to third parties
A Discount account should be established when interest is included in the face amount of the note.
The process of reducing a discount by recognizing interest expense is frequently referred to as discount amortization.
The guidelines for the recognition of contingent liabilities reflect that they should be recorded in the accounts when it is probable that the future event will occur and the amount of the liability can be reasonably:
By definition, contingent liabilities are improbable.
Which of the following payroll taxes is borne exclusively by the employer?
social security tax or unemployment tax
Deductions from employee earnings, plus net pay, equals:
gross earnings or gross withholdings
Withholding allowances are determined by reference to the:
Amounts withheld from employees' paychecks are recorded on the employer's books as a:
Stated simply, paid vacation time should be expensed while the employee is on vacation.
The total amounts owed to employees for retirement benefits will appear on the balance sheet as a liability.