ACCT 203 Lecture Notes - Lecture 11: Interest Expense, Income Tax, Electronic Funds Transfer
22 May 2018
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GMU ACCOUNTING 203 Lecture 11
- Probable AND Estimable (likely) = Record it.
- Reasonably possible (could occur) = Do not record it, disclose it.
-Remote (unlikely) = Do nothing.
Reasonably Possible Contingent Liabilities
Potential legal claims, debt guarantees,
Times Interest Earned Formula
income before interest expense and income taxes
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Interest expense
Payroll Register
Usually shows the pay period dates, hours worked, gross pay, deductions, and net
pay of each employee for each pay period.
Employee Earnings Report
A cumulative record of an employee's hours worked, gross earnings, deductions,
and net pay.
W-4 Form
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Probable and estimable (likely) = record it. Reasonably possible (could occur) = do not record it, disclose it. Times interest earned formula income before interest expense and income taxes. Usually shows the pay period dates, hours worked, gross pay, deductions, and net pay of each employee for each pay period. A cumulative record of an employee"s hours worked, gross earnings, deductions, and net pay. Each employee records the number of withholding allowances claimed on a witholding allowance certificate (w-4) filed with the employer. When the number of allowances increases, the amount of income taxes withheld decreases. When this is used a company either 1. draws one check for total payroll on the regular bank account and deposits it in the payroll bank account or 2. executes an electronic funds transfer to the payroll bank account. Since income tax expense is created by earning income, a liability is incurred when income is earned.
