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Liabilities in Accounting

In: Business and Management

Submitted By jswain428
Words 310
Pages 2
Phase 2 DB Liabilities
Jason Swain

A contingent liability is a potential liability. A potential obligation that may be incurred depending on what may happen in the future. . A contingent liability is recorded in the books of accounts only if the contingency is probable and the amount of the liability can be estimated. (

Some liabilities are estimated liabilities. A compamy may have utility bills, or taxes pay, employee salaries insurance premiums, and maintenance that are owed. The exact amounts may not be known at the time that the financial statements are prepared so the liabilities had to be recorded by using estimated amounts.

The amount an employee clears on her or his payroll check after deductions and taves are taken out is the net amount: Gross pay is the amount of an employee's pretax compensation based on hours worked times an hourly rate of pay. (Weiss, 2015 livechat,).

An employee may have additional amount of their income to pay taxes on the money earned.. This amount comes out of the total or gross amount earned by the employee. Other amounts taken out of the gross pay such as insurance 401k contributions are taken out of the gross amount an employee earns.. (Weiss, 2015 livechat) Social Security tax along with the Medicare tax make up what is referred to as FICA In the year 2015, the employer's portion of the Social Security tax is 6.2% of an employee's annual wages and salary. (

Unemployment taxes paid by an company for their employees based on FUTA. The FUTA rate is 6.0% This amount is deducted from the amount of employee federal unemployment taxes you owe. Some states have their own State Unemployment Insurance Tax
Act or SUTA. All companies’ even small businesses must pay this tax.

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