Bill Is Working as the Only Employee at a Local

question 309

Multiple Choice

Bill is working as the only employee at a local store. The relation between Bill and the owner of the store is such that Bill is ________ and the owner is ________.

• A) the agent; the principal
• B) both principal and agent; neither a principal nor an agent
• C) neither a principal nor an agent; both principal and agent
• D) the principal; the agent

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Definitions:

Journal Entry

A record in the books of account that represents a financial transaction.

Payroll Taxes Expense

Taxes that employers are required to pay based on the wages and salaries of their employees, such as Social Security and Medicare taxes.

FICA Tax

A U.S. federal payroll tax used to fund Social Security and Medicare, distributed between employees and employers.

FUTA Tax

A United States federal tax levied on employers to fund state workforce agencies and unemployment benefits.