The journal entry to record payroll:
A)debits salary expense for the gross payroll and credits salary payable for the net pay.
B)credits income tax payable for the income tax that has been withheld from the employees.
C)credits FICA payable for the social security and Medicare tax withheld from the employees.
D)does all of the above.

Question

Quizplus · Accepted Answer

All of the given options are part of recording payroll transactions. Debiting salary expense for the gross payroll and crediting salary payable for the net pay records the amount of total wages and salaries earned by employees and the amount of wages and salaries owed to them. Crediting income tax payable represents the amount of federal and state taxes withheld from employees' salaries. Crediting FICA payable accounts for the social security and Medicare taxes. Therefore, all of these steps must be taken to record payroll.

The Journal Entry to Record Payroll