Randall,an employee of Ramsay's,Inc.,has gross salary for March of $4,000.The entire amount is under the OASDI limit of $118,500 and thus subject to FICA.He is also subject to federal income tax at a rate of 18%.Randall 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 liabilities for payroll withholding deductions?
A) debit to Salaries Payable
B) credit to United Way Payable
C) debit to FICA Taxes Payable
D) debit to Cash

Question

Quizplus · Accepted Answer

The correct answer is B) credit to United Way Payable. This is because the question asks about the liabilities for payroll withholding deductions. When an employee has a portion of their salary withheld for something like a donation to the United Way, this amount is recorded as a liability (United Way Payable) until the company pays the amount to the United Way. The other options (A, C, D) do not represent liabilities for payroll withholding deductions; instead, they represent either expenses or other types of transactions not directly related to the question's focus on withholding liabilities.

Randall,an Employee of Ramsay's,Inc