Which of the following statements is true?
A)Payroll deductions are an expense of the company.
B)When the payroll is recorded,the total wages expense is equal to the sum of all the deductions.
C)The net pay is debited to wages expense when the payroll is recorded.
D)Gross pay is equal to the hours worked x the hourly pay rate.

Question

Quizplus · Accepted Answer

Gross pay is calculated by multiplying hours worked by the hourly pay rate, while payroll deductions are not considered expenses of the company. The net pay, which is the amount after payroll deductions, is typically debited to a liability account like “employee income tax payable” or “employee benefits payable”, not to wages expense. Therefore, option D is the only true statement.

Which of the Following Statements Is True