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

What is the term for the total amount of money an employee earns in a pay period before any deductions are made?

Payroll tax

Withholding allowance

Net pay

Gross pay

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Verified step by step guidance

Understand the concept of 'Gross Pay': Gross pay refers to the total amount of money an employee earns during a pay period before any deductions, such as taxes, insurance, or retirement contributions, are subtracted.

Differentiate between related terms: Payroll tax refers to taxes deducted from an employee's earnings, withholding allowance affects the amount of tax withheld, and net pay is the amount an employee takes home after deductions.

Recognize that gross pay is the starting point in payroll calculations, as it represents the full earnings before any adjustments.

Apply this understanding to the question: The term that matches the description of total earnings before deductions is 'Gross Pay.'

Reinforce the concept: Gross pay is a foundational term in payroll accounting and is used to calculate deductions and net pay.