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 $106,800,and thus subject to FICA.He is also subject to federal income tax at a rate of 18%.His year-to-date pay has already exceeded the $7,000 cap for FUTA and SUTA.The fifth journal entry in the payroll cycle to record the payment by the company of payroll taxes to the government includes which of the following?
A) Credit to Cash
B) Credit to Employee income tax payable
C) Credit to FICA tax payable
D) Debit to Salary payable

Question

Quizplus · Accepted Answer

The payment of payroll taxes involves reducing the cash account, hence a credit to Cash is recorded.

Art Parrish,the Sole Employee of Parrish Sales,has Gross Salary for March