The Correct Journal Entry to Record the Payment of FUTA

question 12

Multiple Choice

The correct journal entry to record the payment of FUTA is to:

• A) debit Cash; credit FUTA Payable.
• B) debit FUTA Expense; credit Cash.
• C) debit FUTA Payable; credit Cash.
• D) debit Cash; credit FUTA Expense.

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Definitions:

Perpetual Inventory System

An inventory system that updates the quantity and cost of inventory immediately following purchase or sale activities.

Merchandise Inventory

Goods and products that a retailer, wholesaler, or distributor holds in stock with the intent to sell them for profit.

Cost of Goods Sold

The total direct costs attributable to the production of goods sold by a company during a specific period.

Sales Returns & Allowances

Transactions where sellers accept returned goods from buyers, or provide a price reduction or discount, reducing the initial sales revenue.