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 statements about payroll taxes is true?

Employers are not required to withhold federal income tax from employees' wages.

Only employees are responsible for paying federal unemployment (FUTA) taxes.

Both employees and employers are required to pay Social Security and Medicare taxes.

Payroll taxes are only paid once a year, at the end of the fiscal year.

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Verified step by step guidance

Understand the concept of payroll taxes: Payroll taxes are taxes imposed on employers and employees, and they include Social Security, Medicare, federal income tax withholding, and federal unemployment taxes (FUTA). These taxes are typically calculated and paid periodically, not just once a year.

Clarify the employer's responsibility for federal income tax withholding: Employers are required to withhold federal income tax from employees' wages based on the information provided by employees on their W-4 forms. This withholding ensures that employees pay their income taxes throughout the year.

Explain the responsibility for federal unemployment (FUTA) taxes: FUTA taxes are paid solely by employers, not employees. These taxes fund unemployment benefits for workers who lose their jobs.

Discuss Social Security and Medicare taxes: Both employees and employers are required to pay Social Security and Medicare taxes. Employers match the amount withheld from employees' wages for these taxes, contributing an equal share.

Address the frequency of payroll tax payments: Payroll taxes are not paid only once a year. Employers are required to deposit payroll taxes periodically, typically on a monthly, semi-weekly, or quarterly basis, depending on the size of their payroll and IRS regulations.