FAR 13 - Payroll

Question 1

Is Deferred Income Tax liability a current liability or Long term?

Answer 1

Long term

Question 2

When you accrue vacation, does the liability or expense account carry the whole balance, and what account decreases when used?

Answer 2

The expense account carries the whole amount

Liability account is reduced when used

Question 3

Which rights are not contingent on an employee’s future services?

Answer 3

Vested

Question 4

True or False?

You should record warranties at Fair value when the obligation can be settled by contracting with a third party to provide the goods and services.

Answer 4

TRUE

Question 5

What two accounts are affected when a cash dividend is declared? And then what 2 accounts when paid?

Answer 5

Declared: RE Decrease and Liab increased - DIvidend payable
Paid : Cash Decreased and Liab Decreased