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 $110,100, and thus subject to FICA. His year-to-date pay has already exceeded the $7,000 cap for FUTA and SUTA. Which of the following is a part of journal entry in the payroll cycle to record the employer's payroll taxes?
A)credit to Payroll Tax Expense
B)debit to FICA Tax Payable
C)credit to FICA-Medicare Tax Payable
D)debit to Cash

Question

Quizplus · Accepted Answer

The employer's payroll taxes include FICA taxes, which consist of Social Security (OASDI) and Medicare taxes. The employer must credit FICA-Medicare Tax Payable to record the liability for the employer's portion of Medicare taxes.

Art Parrish, the Sole Employee of Parrish Sales, Has Gross