Asked by Norma Ocampo on Apr 28, 2024
Verified
The employer should record deductions from employee pay as:
A) Employee receivables.
B) Payroll taxes.
C) Current liabilities.
D) Wages payable.
E) Employee payables.
Deductions
Amounts subtracted from gross income or revenue to calculate net income or taxable income, including expenses, allowances, and discounts.
Employee Receivables
Amounts owed to a company by its employees, often due to overpayment or advancements.
- Comprehend the basic principles of payroll accounting, which encompass calculating gross pay, identifying deductions, and determining net pay.
- Explain the employer's payroll responsibilities and the significance of accurate payroll recordkeeping.
Verified Answer
KJ
Kaitlyn JonesApr 30, 2024
Final Answer :
C
Explanation :
Deductions from employee pay are amounts that the employer withholds from the employee's gross pay, such as taxes, social security, Medicare, health insurance premiums, and retirement contributions. These amounts are current liabilities because they represent obligations that the employer owes to third parties, such as the government and insurance providers, on behalf of its employees. Employee receivables, wages payable, and employee payables do not accurately reflect the nature of these deductions. Payroll taxes are a type of deduction, not a category in which to record them.
Learning Objectives
- Comprehend the basic principles of payroll accounting, which encompass calculating gross pay, identifying deductions, and determining net pay.
- Explain the employer's payroll responsibilities and the significance of accurate payroll recordkeeping.