The employer should record deductions from employee pay as:
A) Employee receivables.
B) Employee payables.
C) Payroll taxes.
D) Current liabilities.
E) Wages payable.

Question

Quizplus · Accepted Answer

Deductions from employee pay should be recorded as current liabilities because they reflect amounts that the employer owes to third parties on behalf of the employees, such as taxes, insurance premiums, and retirement contributions. Employee receivables and payables are not appropriate because the deductions are not amounts that the employee owes or is owed. Payroll taxes is a more specific category that is included within the broader category of current liabilities. Wages payable refers specifically to regular wages owed to employees, not deductions from those wages.

The Employer Should Record Deductions from Employee Pay As