The employer records the amount of federal income tax withheld from employees as
A) Income Tax Expense.
B) Employee Federal Income Tax Payable.
C) Social Security Tax Expense.
D) Social Security Tax Payable.

Question

Quizplus · Accepted Answer

The amount of federal income tax withheld from employees is a liability owed by the employer to the government on behalf of the employee. As such, it should be recorded as an Employee Federal Income Tax Payable. Option A, Income Tax Expense, represents the tax expense incurred by the employer, not the liability owed. Option C, Social Security Tax Expense, represents a different type of tax altogether, and Option D, Social Security Tax Payable, also represents a different liability owed by the employer.

The Employer Records the Amount of Federal Income Tax Withheld