Art Parrish,the Sole Employee of Parrish Sales,has Gross Salary for March

question 99

Multiple Choice

Art Parrish,the sole employee of Parrish Sales,has gross salary for March of $4,000.The entire amount is under the OASDI limit of $106,800,and thus subject to FICA.He is also subject to federal income tax at a rate of 18%.Art has a deduction of $320 for health insurance and $80 for United Way.The second entry in the payroll cycle to record the disbursement of his net pay should include which of the following?

• A) Credit to Salary payable
• B) Debit to Payable to the United Way
• C) Debit FICA tax payable
• D) Credit Cash

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Definitions:

Consumer Credit-Card Rate

The interest rate that banks charge consumers on the balances they carry on their credit cards.

Prime Rate

The interest rate that commercial banks charge their most creditworthy customers, often used as a benchmark in lending rates.

Economic Resource

Any resource used by humans to produce goods or services, including labor, capital, land, and entrepreneurship.