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College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756

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Chapter
Section
BuyFindarrow_forward

College Accounting, Chapters 1-27

23rd Edition
HEINTZ + 1 other
ISBN: 9781337794756
Textbook Problem

The general ledger accounts commonly used to record the employer’s Social Security, Medicare, FUTA, and SUTA taxes are classified as

  1. (a) assets.
  2. (b) liabilities.
  3. (c) expenses.
  4. (d) owner’s equity.

To determine

Ascertain the correct classification for the employer’s Social Security, Medicare, FUTA and SUTA taxes.

Explanation

Liabilities:

The claims creditors have over assets or resources of a company are referred to as liabilities. These are the debt obligations owed by company to creditors. Liabilities are classified on the balance sheet as current liabilities and long-term liabilities

Social security, Medicare tax, FUTA and SUTA taxes that are imposed on an employer are needed to be paid. It is considered as debt obligation to the company and they are usually credited...

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