Gainesville Truck Center
This company has a weekly payroll of $10,000 for its employees who work Monday through Friday. Federal and state income taxes are withheld in the amounts of $1,700 and $400, respectively, and FICA taxes are withheld at a mandatory rate of 7.65% (6.2% for Social Security and 1.45% for Medicare). In addition, the federal and state unemployment taxes are applied at rates of 2% and 5%, respectively. The company's year-end is December 31.
-Refer to Gainesville Truck Center. Which of the following expense accounts will be recorded as a result of this payroll transaction?
1)Wages Expense
2)Federal Unemployment Tax Expense
3)State Unemployment Tax Expense
4)Social Security Tax Expense
5)Medicare Tax Expense

Question

Quizplus · Accepted Answer

The correct answer is D because all of the listed accounts (Wages Expense, Federal Unemployment Tax Expense, State Unemployment Tax Expense, Social Security Tax Expense, and Medicare Tax Expense) are involved in recording the company's payroll transaction. Wages Expense reflects the total payroll, Social Security and Medicare Tax Expenses represent the company's share of FICA taxes, and Federal and State Unemployment Tax Expenses are the company's contributions to unemployment insurance.

Gainesville Truck Center This Company Has a Weekly Payroll of $10,000 for Its