Understanding Employer Payroll Taxes and Accounting Treatment of Expense Recording.

The transaction to record employer payroll taxes expense is journalized at the end of the quarter.

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To answer this question, it is first important to understand what employer payroll taxes are and how they are recorded in accounting.

Employer payroll taxes are taxes that are paid by an employer on behalf of their employees. These taxes include Social Security taxes, Medicare taxes, and federal and state unemployment taxes. These taxes are subtracted from an employee’s gross pay and are paid by the employer to the appropriate tax agencies.

In order to record the expense associated with employer payroll taxes, the business must journalize the transaction. Typically, the employer payroll taxes are recorded at the end of each pay period. This ensures that the tax liability is accurately recorded and that the business is aware of their total tax liability for each pay period.

However, the question is specifically asking about whether the transaction to record employer payroll taxes expense should be journalized at the end of the quarter. The answer to this question depends on the accounting method that the business is using.

If the business is using accrual accounting, the transaction to record employer payroll taxes expense should be journalized each pay period. This ensures that the tax liability is accurately recorded and that the business has an accurate picture of its financial position.

If the business is using cash basis accounting, the transaction to record employer payroll taxes expense may be journalized at the end of the quarter. This is because cash basis accounting only records transactions when cash is received or paid, rather than recording them when an obligation is incurred.

In summary, the transaction to record employer payroll taxes expense should be journalized each pay period if the business is using accrual accounting, but may be journalized at the end of the quarter if the business is using cash basis accounting.

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