College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570



College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Which of the following is not a deduction from total earnings?

  1. a. Federal income tax
  2. b. Union dues
  3. c. 2.5 hours of overtime
  4. d. Medical insurance premiums
  5. e. State income tax

To determine

Identify the option that is not deducted from the total earnings.


Gross pay:

Gross pay is a payment made to an employee for completion of work allocated by the company. Gross pay is computed by using normal hours worked by the employee with hourly wages rate.

Justification for the incorrect answer:

Option a, b, d and e:

Federal income tax, union dues, medical insurance premium, state income tax are deducted from the total earnings. These taxes are paid both employees and employer and few taxes like FUTA are paid only employer. Hence, option a, b, d and e are incorrect answer.

Justification for the correct answer:

Option c:


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