The employer records the amount of federal income tax withheld as:
A)a liability.
B)an expense.
C)an asset.
D)a payroll tax expense.

Question

Quizplus · Accepted Answer

Federal income tax withheld is a liability because it represents an obligation to remit the withheld funds to the federal government. The employer is holding onto the funds until they are remitted to the government, so it is recorded as a liability on the books.

The Employer Records the Amount of Federal Income Tax Withheld