Compensation, Taxes & Liabilities Accounting Flashcards

Compensation, Taxes & Liabilities Accounting Flashcards
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Long-Term Liability
We define these as liabilities that will be due after a year. They could be mortgage loans or vehicle payments.
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Discount Bond
These are bonds that are purchased for a value that is below their principal.
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Principal
We use this term when referring to the amount of money a company borrows when taking out a bond.
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Premium Bond
A bond that can be purchased for more than it's worth, or at a higher value than its principal.
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Capital Lease
Companies keep the equipment when this kind of lease ends. The equipment is an asset and the payments are a liability, so you must list the equipment and payments on the company's balance sheet.
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Pension
Employees may receive these lifelong payments after they retire.
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Indirect Employees
We use this term to refer to employees who work to support the manufacture of products.
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Direct Employees
These are employees who are solely involved in creating products for a company.
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Accounting Contingencies
These are events that can negatively or positively impact a business and that are likely to occur at some point in the future.
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Environmental Contingency
A liability contingency subtype that refers to costs related to the environment. A company's responsibility to clean up their waste would represent this kind of contingency.
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Gain Contingency
Contingencies of this kind indicate that something will happen in the future that will positively affect a company's profits, such as finding that your company is owed a monetary credit.
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Liability Contingency
These contingencies involve events that are likely to occur in the future that will negatively impact the profit of a company. Companies in the middle of litigation have this kind of contingency.
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25 cards in set

Flashcard Content Overview

Working on this set of flashcards can allow you to review liability, gain and environmental contingencies in accounting. You'll also be able to consider indirect employees, direct employees and the impact of pensions on accounting. These flashcards focus on bonds, including premium and discount bonds. Long-term and current liability will be covered, along with sales and property tax. Furthermore, you'll have the chance to review different types of commission structures with this set.

Front
Back
Liability Contingency
These contingencies involve events that are likely to occur in the future that will negatively impact the profit of a company. Companies in the middle of litigation have this kind of contingency.
Gain Contingency
Contingencies of this kind indicate that something will happen in the future that will positively affect a company's profits, such as finding that your company is owed a monetary credit.
Environmental Contingency
A liability contingency subtype that refers to costs related to the environment. A company's responsibility to clean up their waste would represent this kind of contingency.
Accounting Contingencies
These are events that can negatively or positively impact a business and that are likely to occur at some point in the future.
Direct Employees
These are employees who are solely involved in creating products for a company.
Indirect Employees
We use this term to refer to employees who work to support the manufacture of products.
Pension
Employees may receive these lifelong payments after they retire.
Capital Lease
Companies keep the equipment when this kind of lease ends. The equipment is an asset and the payments are a liability, so you must list the equipment and payments on the company's balance sheet.
Premium Bond
A bond that can be purchased for more than it's worth, or at a higher value than its principal.
Principal
We use this term when referring to the amount of money a company borrows when taking out a bond.
Discount Bond
These are bonds that are purchased for a value that is below their principal.
Long-Term Liability
We define these as liabilities that will be due after a year. They could be mortgage loans or vehicle payments.
Current Liability
This represents any liabilities a company owes within a year. They can include employee salaries, the cost of supplies and sales tax.
Warranty
This represents a company's promise to take care of damaged products or parts by either repairing or replacing them.
Property Tax
A tax businesses owe based on the market value of their business properties.
Sales Tax
The government levies this amount of money from consumer purchases.
Income Tax
This tax is taken from your wages by the government.
Estimated Tax
Businesses are responsible for paying this kind of taxes four times a year. This kind of tax estimates how much the business will owe in taxes for the entire year.
Percent of Sales Commission Method
You can use this method of paying commission if you offer your employees a percentage of each sale as commission.
Fixed Commission Structure
This kind of commission structure offers employees a fixed commission, such as $100, for each product that they sell.
Stair Step Commission Structure
Businesses that use this method for assigning commissions will raise the commission percentage that employees receive based on sales increases.
Federal Tax Liability
A type of liability owed to the government in the form of taxes. This type of liability is due to be paid on April 15th of every year.
Sales Tax Liability
This kind of tax liability is calculated based on purchases. Sellers collect this tax and then deliver it to the tax collecting agency of the state.
Allowance for Doubtful Accounts
An account that acts to lower the balance in a company's account receivable account by offsetting the account.
Uncollectible Accounts
These are accounts that a business can't collect because a customer can't or won't pay the account.

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