what happens to the amount that a business withholds as taxes from an employee\'
ID: 2492080 • Letter: W
Question
what happens to the amount that a business withholds as taxes from an employee's earnings -(it's a current liability to the employer)
-for depreciation, know how to calculate for two consecutive years
- the different depreciation methods discussed
- LCM rule
- what is a deficit is and how it appears in a corporations financial statements
- how to correct errors in a bank reconciliation
-what would result in an over or understatement of ending inventory
- the steps of the accounting cycle
-what does the process of posting do?
-what is the entity principle?
-how is CGS determined in a periodic system?
-why are financial statements prepared?
-how is profitability defined?
-using the same method year after year is in line with which GAAP principle?
-what is liquidity?
-What kind of accounts are prepaid expenses and unearned revenues?
-what are characteristics of financial accounting?
-what is a current liability vs. long term liability? –
-what purpose does a bank reconciliation serve?
-know the four categories of adjustments
-what is accumulated depreciation?
-what are the basic financial statements?
-what exactly is a trial balance?
-given info for stock – how to calculate the balance in the common stock account
-what is the purpose of an audit?
-what is retained earnings?
-what is an NSF check and how is it reflected on a bank rec?
-what are the differences the difference between authorized, issued, and outstanding shares of stock
- Closing entries do what?
- What is an NSF check and how does it affect a bank rec?
-What are advantages and disadvantages of the corporate form of organization?
- What do a DR and CR balance mean in the income summary account?
- How is an after closing trial balance different from an adjusted trial balance?
- What is the Lower of cost or market rule and what does it apply to?
- What are the two principles of GAAP applied for adjusting entries?
- What is petty cash? what does a petty cash fund do?
- how to calculate the gross profit rate
- What is the difference between current and long term liabilities?
Explanation / Answer
what happens to the amount that a business withholds as taxes from an employee's earnings -(it's a current liability to the employer)
Answer:Yes, it is a current liability to the employer. Payroll taxes withheld from employees' wages and salaries are liabilities of the employer. The payroll taxes withheld from employees include the employees' portion of the FICA or Social Security and Medicare taxes, federal income taxes, and state income taxes.
LCM rule
Answer: The lower of cost or market rule states that a business must record the cost of inventory at whichever cost is lower – the original cost or its current market price.
what is a deficit is and how it appears in a corporations financial statements.
Answer: Deficit is the amount by which something, especially a sum of money, is too small.
An accumulated deficit reduces stockholders’ equity on the balance sheet, which decreases stockholders’ stake in the company.
What is the difference between current and long term liabilities?
Answer: Current Liabilities: Money that a business owner must pay to a creditor within 12 months of the balance sheet date is a current liability.
Long-Term Liabilities: Long-term liabilities are due more than a year after the balance sheet date. These include notes and bonds payable, long-term rent, pensions and other benefits.
- how to calculate the gross profit rate
Answer: GP rate=(Gross Profit/Sales)*100
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