Explain Debits and Credits and Their Role in the Accounting

question 98

Essay

Explain debits and credits and their role in the accounting system of a business.

---

Definitions:

Social Security Tax

A tax levied on both employers and employees to fund the Social Security program, which provides benefits to retirees, disabled workers, and survivors of deceased workers.

Withholding Rate

The percentage of an employee's income that an employer holds back for tax purposes before paying the employee.

Labor Elasticity

The responsiveness of the quantity of labor supplied or demanded to changes in wages or employment conditions.

Deadweight Loss

Is a loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is not achievable.