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

2. Transaction Analysis

Journal Entries: Debits and Credits

Financial Accounting

2. Transaction Analysis

Journal Entries: Debits and Credits

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Multiple Choice

Which of the following would most likely be recorded as the largest deduction from an employee's gross pay in a typical payroll journal entry?

Federal income tax withholding

Employee loan repayment

Reimbursement for business expenses

Charitable contributions

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Verified step by step guidance

Understand the concept of gross pay: Gross pay is the total earnings of an employee before any deductions are made.

Identify the types of deductions: Common deductions from gross pay include federal income tax withholding, Social Security and Medicare taxes, employee loan repayments, charitable contributions, and reimbursements for business expenses.

Analyze the nature of each deduction: Federal income tax withholding is typically the largest deduction because it is mandated by law and calculated based on the employee's earnings and tax bracket. Other deductions, such as employee loan repayments, charitable contributions, and reimbursements, are usually smaller or voluntary.

Consider the typical payroll journal entry: In a payroll journal entry, deductions are recorded as liabilities or reductions to the employee's gross pay. Federal income tax withholding is prominently recorded due to its significant impact on net pay.

Conclude that federal income tax withholding is most likely the largest deduction: This deduction is required by law and applies to all employees earning taxable income, making it the most substantial deduction in a typical payroll journal entry.