The Following Totals for the Month of June Were Taken

question 67

Multiple Choice

The following totals for the month of June were taken from the payroll register of Ford Company. The entry to record accrual of Ford Company's payroll taxes would include a

• A) debit to Payroll Tax Expense for $2,693
• B) credit to Payroll Tax Expense for $2,693
• C) credit to FICA Taxes Payable for $1,160.
• D) credit to Payroll Tax Expense for $1,160.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, which is recognized in the period in which the interest is accrued.

Times Interest Earned Ratio

A financial ratio that measures a company's ability to meet its debt obligations by comparing its income before interest and taxes to its total interest charges.

Estimated Liabilities

Obligations or debts that a company expects to incur but has not yet quantified with certainty.

Note Payable

A written agreement where one party promises to pay another party a definite sum of money at a certain date or on demand.