Accounting II Exam 3 Chapters 8, 9, & 10
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obligation to pay in the future Liabilities
accounts payable, accrued Current Liabilities
expenses, taxes payable,
short-term debt, and unearned
revenue
contra revenue Discounts
prepaid insurance, ar Assets
no interest, more current Accounts payable
-fed and state income tax-fica Employee pays
taxes-health, dental, disability,
and life insurance-retirement
-fed and state unemployment Employer pays
tax-match fica-health, dental,
disability, and life
insurance-retirement
total cash/sales tax rate+1 sales tax calculation
debit balance recording a loss
, probable and reasonably Contingent Liability
estimable to record a liability
potential future loss Contingent Liabilities definition
depending on an event
recored at time of sale Warranties
ability to pay short-term debt liquidity
current assets-current Working Capital
liabilities
current assets / current current ratios (higher=better
liabilities liquidity)
cash+investments+AR/current Acid-test ratio (quick ratio) no
liabilities inventory
amt that'll be paid within a yr current portion of lt debt
from BS date
repairs are made Warranty liability account is debited
as
debit warranty expense credit Accounting for warranties
warranty liability
Debit warranty liability Credit accounting for warranty claims
cash
Questions and Answers with Verified
Solutions | Latest Updated 2026
obligation to pay in the future Liabilities
accounts payable, accrued Current Liabilities
expenses, taxes payable,
short-term debt, and unearned
revenue
contra revenue Discounts
prepaid insurance, ar Assets
no interest, more current Accounts payable
-fed and state income tax-fica Employee pays
taxes-health, dental, disability,
and life insurance-retirement
-fed and state unemployment Employer pays
tax-match fica-health, dental,
disability, and life
insurance-retirement
total cash/sales tax rate+1 sales tax calculation
debit balance recording a loss
, probable and reasonably Contingent Liability
estimable to record a liability
potential future loss Contingent Liabilities definition
depending on an event
recored at time of sale Warranties
ability to pay short-term debt liquidity
current assets-current Working Capital
liabilities
current assets / current current ratios (higher=better
liabilities liquidity)
cash+investments+AR/current Acid-test ratio (quick ratio) no
liabilities inventory
amt that'll be paid within a yr current portion of lt debt
from BS date
repairs are made Warranty liability account is debited
as
debit warranty expense credit Accounting for warranties
warranty liability
Debit warranty liability Credit accounting for warranty claims
cash
