Students will use withholding tax tables and calculate FICA withholding. This begins following Demo 8 . In addition to employee withholdings covered in Chapter 9, employers must also pay taxes related to the payroll. Journal entries for recording employer taxes are explained, together with employer reporting and payment responsibilities. Finally, workers' compensation insurance is covered in general terms.
Many businesses sell merchandise in addition to providing services.
Merchandise sales transactions include sales on account, as well as cash sales. In this chapter, sales on account are entered in a special journal called the sales journal. An Accounts Receivable Control account, together with the subsidiary accounts receivable ledger, is maintained along with the schedule of accounts receivable. Cash sales and collections on previous accounts receivable are accounted for using another new journal, the cash receipts journal. Similar to the sales journal presented in Chapter 11, the purchases journal records purchases on account.