Why Is It Important to Have Columns on the Payroll

question 14

Multiple Choice

Why is it important to have columns on the payroll register title "Earnings subject to Federal Withholding" and
"Earnings subject to FICA"?

• A)Both columns contain information about the employer's tax matching responsibilities.
• B)It facilitates accuracy in employee payroll tax computations.
• C)It allows payroll employees to divert funds into faux accounts.
• D)It adds complexity to the payroll register.

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Definitions:

Common Stock Account

An equity account on a company's balance sheet representing the total value of common shares that have been issued.

Balance Sheet

A financial statement that reports a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition and net worth.

Financial Position

A financial statement element that shows the value of a company's assets, liabilities, and equity at a specific point in time.

Unearned Revenues

Monies received by a company for goods or services yet to be delivered or performed, considered a liability until the obligation is fulfilled.