ACC-111 - Chapter 11

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From Accounting Principles Weygandt Pulled from Wiley

Bonus

Compensation to management and other personnel, based on factors such as increased sales or the amount of net income.

Contingent liability

A potential liability that may become an actual liability in the future

Current ratio

A measure of a company's liquidity; computed as current assets divided by current liabilities.

Employee earnings record

A cumulative record of each employee's gross earnings, deductions, and net pay during the year

Federal unemployment taxes

Taxes imposed on the employer by the federal government that provide benefits for a limited time period to employees who lose their jobs through no fault of their own.

Fees

Payments made for the services of professionals.

FICA taxes

Taxes designed to provide workers with supplemental retirement, employment disability, and medical benefits.

Full-disclosure principle

Requires that companies disclose all circumstances and events that would make a difference to financial statement users.

Gross earnings

Total compensation earned by an employee.

Net pay

Gross earnings less payroll deductions.

Notes payable

Obligations in the form of written promissory notes.

Payroll deductions

Deductions from gross earnings to determine the amount of a paycheck

Payroll register

A payroll record that accumulates the gross earnings, deductions, and net pay by employee for each pay period.

Pension plan

An agreement whereby an employer provides benefits to employees after they retire.

Post-retirement benefits

Payments by employers to retired employees for health care, life insurance, and pensions.

Salaries

Employee pay based on a specified amount rather than an hourly rate.

State unemployment taxes

Taxes imposed on the employer by states that provide benefits to employees who lose their jobs.

Statement of earnings

A document attached to a paycheck that indicates the employee's gross earnings, payroll deductions, and net pay.

Wage and Tax Statement (Form W-2)

A form showing gross earnings, FICA taxes withheld, and income taxes withheld, prepared annually by an employer for each employee.

Wages

Amounts paid to employees based on a rate per hour or on a piece-work basis.

Working capital

A measure of a company's liquidity; computed as current assets minus current liabilities.

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