Journal entries in the books of employer for salary and payroll liabilities. Tax: It is a compulsory financial charge imposed by government on individuals and corporate, failure to pay which invites legal actions. Social Security Tax: Social security tax scheme is a tax scheme which is imposed both on employee and employer. Its rate keeps on changing. Journal Entries: Journal is the book for recording financial transactions in chronological order. It is the first step of accounting. In this process each transaction has two sides- debit side and credit side. Total of debit side must be equal to total of credit side. Accounting rules for journal entries: ► To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains. ► To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

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Chapter 9, Problem 6E

To determine

To prepare:

Journal entries in the books of employer for salary and payroll liabilities.

Tax:

It is a compulsory financial charge imposed by government on individuals and corporate, failure to pay which invites legal actions.

Social Security Tax:

Social security tax scheme is a tax scheme which is imposed both on employee and employer. Its rate keeps on changing.

Journal Entries:

Journal is the book for recording financial transactions in chronological order. It is the first step of accounting. In this process each transaction has two sides- debit side and credit side. Total of debit side must be equal to total of credit side.

Accounting rules for journal entries:

► To increase balance of the account: Debit assets, expenses, losses and credit all liabilities, capital, revenue and gains.

► To decrease balance of the account: Credit assets, expenses, losses and debit all liabilities, capital, revenue and gains.

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