Question

Which of the following statements is true?

A.Payroll Tax Expense increases on the credit side of the account

B.FICA Medicare Payable increases with a credit

C.Federal Income Tax Withholding Payable decreases with a credit

D.Employee Payroll Taxes withheld are recorded in Payroll Tax Expense

Answer 1

Option - B FICA Medicare Payable increases with a credit

The employer's share of payroll taxes is debited to Payroll tax expenses. ( Hence statement - A is false)

Employee share and also employer share of various taxes, i.e FUTA, SUTA, FICA withheld, Social security tax and Medicare are always credited. ( Hence statement - C is false)

Statement - D is false because, employee share is deduction from his wage and not an expenses to employer.

Hence ........... Statement - B is true. FICA medicare is generally credited and it increases with every credit made in this account.