Steve,an employee of Panache Inc.,has gross salary for March of $4,000.The entire amount is under the OASDI limit of $110,100,and thus subject to FICA.He is also subject to federal income tax at a rate of 18%.Steve has a deduction of $320 for health insurance and $80 for United Way.
-Which of the following is included in the entry in the payroll cycle to record the disbursement of his net pay?

Question

Quizplus · Accepted Answer

The disbursement of Steve's net pay will result in a credit to Cash, as the company is paying him the net amount he earned. The other options do not apply, as there is no payable account involved in this transaction. The FICA taxes will also be recorded separately as an employer's liability.

Steve,an Employee of Panache Inc