Use This Information to Answer the Following Question The Entry to Record the Payroll Taxes Expense Would Include

question 178

Multiple Choice

Use this information to answer the following question. Baker Company has the following information for the pay period of January 1-15, 2010. Payment occurs on January 20.
$\begin{array}{lrlr}\text { Gross payroll } & \$ 16,000 & \text { Federal income taxes withheld } & \$ 1,800 \\\text { Social security and Medicare rate } & 7.65 \% & \text { Federal unemployment tax rate } & 8 \% \\\text { State unemployment tax rate } & 5.4 \% & &\end{array}$ The entry to record the payroll taxes expense would include a credit to

• A) Salaries Payable.
• B) Federal Income Taxes Payable.
• C) Social Security Tax Payable.
• D) Cash.

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Definitions:

Good Faith

The honest intention to act without taking an unfair advantage over another party, often mentioned in contracts and negotiations.

Good Faith

The principle of honesty and fairness in dealings, implying a sincere intention without deception.

Negligent

A failure to behave with the level of care that someone of ordinary prudence would have exercised under the same circumstances, leading to unintended harm.

Instrument

A written legal document that formalizes an agreement or obligation between parties or is used to create a formal record.