In the Journal Entry to Record the Payment of the Taxes

question 13

Multiple Choice

In the journal entry to record the payment of the taxes shown on the quarterly 941 tax form, the debit(s) would be to

• A)Cash only.
• B)FICA Tax Payable (employee and employer) and Federal Income Tax Payable.
• C)FICA Tax Payable (employee only) and Federal Income Tax Payable.
• D)Federal Income Tax Payable only.
• E)FICA Tax Payable (employer only) and Federal Income Tax Payable.

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Definitions:

Financial Break-even

The point at which total revenue equals total costs and expenses, leaving the company with no net profit or loss.

Variable Cost

Costs that move in correspondence with the quantity of products made or services sold.

Fixed Costs

Expenses that do not vary with production volume or business activity level, such as rent, salaries, and insurance premiums.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating the extent to which a firm uses fixed versus variable costs.