Current Liabilities

account payable

account for financial obligations to suppliers after purchasing products or services on credit

Additional Medicare Tax

requirement for employers to withhold 0.9% from employee pay for individuals who exceed an income threshold based on their filing status

contingency

current situation, where the outcome is unknown or uncertain and will not be resolved until a future point in time

contingent liability

uncertain outcome to a current condition that could produce a future debt or negative obligation for the company

current liability

debt or obligation due within one year or, in rare cases, a company’s standard operating cycle, whichever is greater

current portion of a note payable

portion of a long-term note due during the company’s current operating period

defined contribution plans

money set aside and held in account for employee’s retirement with possible contribution from employers

federal income tax withholding

amount withheld from employee pay based on employee responses given on Form W-4

Federal Insurance Contribution Act (FICA) tax

involuntary tax mandated by FICA that requires employers to withhold taxes from employee wages "to provide benefits for retirees, the disabled, and children"

Federal Unemployment Tax Act (FUTA)

response to a law requiring employers to pay into a federal unemployment insurance system that covers employees in case of job disruption due to factors outside of their control

gross income (pay)

amount earned by the employee before any reductions in pay occur due to involuntary and voluntary deductions

interest

monetary incentive to the lender, which justifies loan risk; interest is paid to the lender by the borrower

involuntary deduction

withholding that neither the employer nor the employee have control over, and is required by law

likelihood of occurrence

contingent liability must be recognized and disclosed if there is a probable liability determination before the preparation of financial statements has occurred

local income tax withholding

applied to those living or working within a jurisdiction to cover schooling, social services, park maintenance, and law enforcement

measurement requirement

company’s ability to reasonably estimate the amount of loss

Medicare tax rate

currently 1.45% of employee gross income with no taxable earnings cap

net income (pay)

(also, take home pay) remaining employee earnings balance after involuntary and voluntary deductions from employee pay

note payable

legal document between a borrower and a lender specifying terms of a financial arrangement; in most situations, the debt is long-term

principal

initial borrowed amount of a loan, not including interest; also, face value or maturity value of a bond (the amount to be paid at maturity)

probable and estimable

contingent liability is likely to occur and can be reasonably estimated

probable and inestimable

contingent liability is likely to occur but cannot be reasonably estimated

reasonably possible

contingent liability could occur but is not probable

remote

contingent liability is unlikely to occur

short-term note payable

debt created and due within a company’s operating period (less than a year)

Social Security tax rate

currently 6.2% of employees gross wage earnings with a maximum taxable earnings amount of $127,200 in 2017 and $128,400 in 2018

state income tax withholding

reduction to employee pay determined by responses given on Form W-4, or on a state withholdings certificate

State Unemployment Tax Act (SUTA)

response to a law requiring employers to pay into a state unemployment insurance system that covers employees in case of job disruption due to factors outside of their control

taxes payable

liability created when a company collects taxes on behalf of employees and customers

unearned revenue

advance payment for a product or service that has yet to be provided by the company; the transaction is a liability until the product or service is provided

vacation compensation

stipend provided by the employer to employees when they take time off for vacation

voluntary deduction

not required to be removed from employee pay unless the employee designates reduction of this amount