Art Parrish,the Sole Employee of Parrish Sales,has Gross Salary for March

question 13

True/False

Art Parrish,the sole employee of Parrish Sales,has gross salary for March of $4,000.The entire amount is under the OASDI limit of $106,800,and thus subject to FICA.The total amount of FICA that will be recorded as company expense totals $612.

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Definitions:

Contingent Liabilities

Potential liabilities that may occur depending on the outcome of a future event.

Remote Possibility

A very low probability event; in Accounting, refers to uncertain events that are considered unlikely to happen and may not be recorded.

Current Liabilities

Obligations or debts a company must pay within a year, including accounts payable, short-term loans, and accrued expenses.

Liquidity Problem

A financial situation where an entity cannot readily convert assets into cash without a loss in value, leading to difficulties in meeting short-term obligations.