The Following Totals for the Month of April Were Taken

question 207

Multiple Choice

The following totals for the month of April were taken from the payroll records of Noll Company. $$\begin{array} { l r } \text { Salaries } & \$ 120,000 \\\text { FlCA taxes withheld } & 9,180 \\\text { Income taxes withheld } & 25,000 \\\text { Medical insurance deductions } & 4,500 \\\text { Federal unemployment taxes } & 320 \\\text { State unemployment taxes } & 2,160\end{array}$$ The entry to record accrual of employer's payroll taxes would include a

• A)debit to Payroll Tax Expense for $2,480.
• B)debit to Payroll Tax Expense for $11,660.
• C)credit to FICA Taxes Payable for $18,360.
• D)credit to Payroll Tax Expense for $2,480.

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Definitions:

Equation of Exchange

An economic identity that represents the relationship between the money supply, its velocity, the price level, and the number of transactions conducted, often formulated as MV = PQ.

Identity

The characteristics, attributes, or qualities that make a person or thing unique and distinguishable from others.

Nominal GDP

The value of the final goods and services produced in a given year valued at that year’s prices.

Velocity of Money

The speed at which currency is transferred from one deal to another and the frequency of usage of a currency unit within a specific timeframe.