Which of the Following Statements About Payroll Is Correct

question 22

Multiple Choice

Which of the following statements about payroll is correct?

• A)Payroll deductions are an expense of the company.
• B)When recording the payroll,Salaries and Wages Expense equals the sum of all the deductions.
• C)The net pay is debited to Salaries and Wages Expense when the payroll is recorded.
• D)Gross earnings are computed by multiplying the time worked by the pay rate promised by the employer.

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Definitions:

Discount Rate

The interest rate charged by central banks on loans to commercial banks or the rate used in discounted cash flow analysis to determine the present value of future cash flows.

Cash Discounts

A reduction in the price of goods or services offered to customers as an incentive for early payment within a specified period.

Interest Days

The number of days over which interest accrues on a loan, deposit, or investment.

Finance Charge

The fee that the seller charges for the privilege of buying on credit.