Match each of the following terms with the appropriate definitions.

Question

A) Payroll bank account
B) Times interest earned
C) Federal depository bank
D) Payroll register
E) Gross pay
F) Employee benefits
G) Current liabilities
H) Deferred income tax liability
I) Short-term note payable
J) Warranty

1. A record for a pay period that shows the pay period dates, regular and overtime hours worked, gross pay, net pay and deductions.
2. Obligations due within one year or the company's operating cycle, whichever is longer.
3. A special bank account used solely for paying employees; each pay period an amount equal to the total employees net pay is deposited and the employees' payroll checks are drawn on that account.
4. A seller's obligation to replace or correct a product or service that fails to perform as expected within a specified period.
5. Total compensation earned by an employee.
6. Compensation provided to employees beyond salaries and wages, such as premiums for medical insurance and contributions to pension plans.
7. Payments of income taxes that are deferred until future years because of temporary
differences between GAAP and tax accounting rules.
8. A bank authorized to accept deposits of amounts payable to the federal government,
including payroll taxes.
9. A calculation of a company's risk of its ability to pay interest when due.
10. A written promise to pay a specified amount on a definite future date within one year or the company's operating cycle, whichever is longer.

Answer 1

1. D) Payroll register
2. G) Current liabilities
3. A) Payroll bank account
4. J) Warranty
5. E) Gross pay
6. F) Employee benefits
7. H) Deferred income tax liability
8. C) Federal depository bank
9. B) Times interest earned
10. I) Short-term note payable