Prompt 1
What are the common deduction items on the paycheck? If you currently work for an employer, we know how important it is to receive paychecks on a timely basis, but the question is have you ever reviewed your paycheck to understand what deduction items on the paycheck and if the paycheck is calculated accurately? You might want to double check if you have the following items: FICA, FIT, SIT, SDI, SUTA, Child support, etc.
Please also consider the following question:
What payroll taxes are employers required to pay? How about employees?
Prompt 2
Now it’s the time to combine payroll and accounting together. We have talked various deduction items on the paycheck, now the question is how are these items and transactions recorded in the journal and how is that reported on Financial Statements? What are the typical journal entries to record wages? What are the typical journal entries to record payroll taxes? As far as journal entries are concerned, you will need to consider how wage expense, payroll tax expense, various deduction items and cash are related to each other. Detailed examples would be great.
