The journal entry to record employer tax accruals includes a debit to:

• A. Payroll Tax Expense
• B. Cash
• C. FICA Taxes Payable
• D. Salaries Payable

Answer: (A)

Verified step by step guidance

1. Understand the concept of employer tax accruals: These are taxes that the employer is responsible for paying, such as Social Security (FICA), Medicare, and unemployment taxes. These taxes are recorded as expenses for the employer.
2. Identify the accounts involved: Employer tax accruals typically involve a debit to an expense account (Payroll Tax Expense) and a credit to liability accounts (e.g., FICA Taxes Payable, Unemployment Taxes Payable). Cash is not credited at this stage because the taxes are accrued, not yet paid.
3. Determine the journal entry structure: In accounting, a debit increases expense accounts, while a credit increases liability accounts. Therefore, the Payroll Tax Expense account will be debited to reflect the employer's tax expense.
4. Credit the appropriate liability accounts: The liability accounts, such as FICA Taxes Payable and other employer tax liabilities, will be credited to show the amount owed by the employer to the government.
5. Review the journal entry: Ensure the debit to Payroll Tax Expense matches the total of the credits to the liability accounts, maintaining the accounting equation (Assets = Liabilities + Equity).