Harrison,an employee of Saft Associates,Inc. ,has gross salary for March of $4,000.The entire amount is under the OASDI limit of $117,000 and thus subject to FICA.He is also subject to federal income tax at a rate of 18%.Harrison has a deduction of $320 for health insurance and $80 for United Way.Which of the following is included in the entry to record the disbursement of his net pay?
A)credit to Salaries and Wages Payable
B)debit to United Way Payable
C)debit to FICA Taxes Payable
D)credit to Cash

Question

Quizplus · Accepted Answer

The entry to record the disbursement of Harrison's net pay would include a credit to Cash, as that is the account that would be paying out the net pay amount. The other options are not applicable because Salaries and Wages Payable would only be used if the full amount of Harrison's gross pay were not paid out in this pay period, United Way Payable would only be used if the amount deducted for United Way had not already been paid out, and FICA Taxes Payable would be used to record the company's liability for the FICA taxes owed based on Harrison's gross pay.

Harrison,an Employee of Saft Associates,Inc