Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

9. Current Liabilities

Payroll and Payroll Taxes

Financial Accounting

9. Current Liabilities

Payroll and Payroll Taxes

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Multiple Choice

Which of the following is true regarding FICA taxes?

FICA taxes are optional deductions from an employee's paycheck.

FICA taxes only fund federal unemployment insurance.

FICA taxes are shared equally by both the employee and the employer.

Only the employee is responsible for paying FICA taxes.

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Verified step by step guidance

Understand the concept of FICA taxes: FICA stands for Federal Insurance Contributions Act, which funds Social Security and Medicare programs. These taxes are mandatory and not optional deductions from an employee's paycheck.

Clarify the funding purpose: FICA taxes do not fund federal unemployment insurance. Instead, they are specifically allocated to Social Security and Medicare programs to provide benefits for retirees, disabled individuals, and healthcare for seniors.

Identify the shared responsibility: FICA taxes are shared equally by both the employee and the employer. Each party contributes a percentage of the employee's wages to fund Social Security and Medicare.

Dispel the misconception: It is incorrect to state that only the employee is responsible for paying FICA taxes. Employers are legally required to match the employee's contribution to FICA taxes.

Summarize the correct statement: The correct answer is that FICA taxes are shared equally by both the employee and the employer, ensuring joint contributions to Social Security and Medicare programs.