The employer records amounts deducted from employee payroll as liabilities until it pays them to the appropriate organizations.

Question

Quizplus · Accepted Answer

This is because the amounts deducted from employee payroll are considered as withheld taxes or employee contributions that need to be remitted to the government or benefit providers. These amounts are not part of the employer's revenue or expenses but rather represent a liability that the employer owes to these organizations. Therefore, the employer records them as such in their financial statements until they are paid out.

The Employer Records Amounts Deducted from Employee Payroll as Liabilities