Question

unearned revenue arises because the business receives goods or services before payment has been made

True or false

retirement compensation is a benefit because the employer sets aside money for the employees future retirement

True or false

gross pay is the total amount of salary,wages,commissions,and bonuses earned by an employee during a pay period,after taxes or any other deductions

True or false

the old age,survivors,and disability insurance component of FICA tax is imposed on the entire amount of an individual employee earnings

True or false

if a business knows that a liability exists but does not know the exact amount the business must estimate the amount of the liability and report it on the balance sheet

True or false

because a company usually does not know the amount of the year-end bonus at year-end,no liability is recorded

True or false

A pension plan is a plan that provides benefits to retired employees

true or false

in regards to corporate income tax which of the following statements is incorrect?

income tax expense is recorded when the federal income tax is incurred

when the corporation makes payment for federal income taxes the account income tax payable is credited

the amount of income taxes that the corporation owes but has not yet paid is classified as a current liability

federal income taxes are calculated on a corparate tax return

Answer 1

1.) TRUE : Unearned revenue arises when the payment is received from the customer before the goods are delivered to them. Therefore the unearned revenue is a current liability to the company.

2.) TRUE: A retirement compensation is a benefit set aside to provide the people with an income at the end of the employment for there future needs, the employer sets aside money for the employee future retirement.

3.) False : Gross pay includes salaries, wages, commission and bonuses. It doesn't include any taxes and deduction. If taxes and deductions are included then it is called as Net pay.

4.) TRUE : The old age, survivors and disability insurance component of FICA is generally imposed on the entire amount of an individual employee earnings.

5.) TRUE : If a business knows that a liability exists but does not know the exact amount the business must estimate the amount of the liability and report it on the balance sheet.

6.) False : A company must record the current liabilities as they are  the obligations to the company like vacation pay and year end bonuses they will not know the amount but an estimate will be made y the company.

7.) TRUE: Pension is a plan that provide retirement benefits to the employees. they are broadly classified into two defined benefit obligation.

8.) In regards to corporate income tax of the following statement is incorrect

when the corporation makes payment for federal income taxes the account income tax payable is credited.