Multiple Choice
Which of the following is a primary focus of financial accounting as compared to other types of accounting?
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1. Introduction to Accounting
Types of Accounting
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Which of the following statements is true regarding Federal Unemployment Tax (FUTA)?
A
FUTA is paid solely by employers and not by employees.
B
FUTA is used to fund Social Security benefits.
C
FUTA taxes are withheld from employees' wages.
D
FUTA tax rates are determined by each individual state.
Verified step by step guidance1
Understand the purpose of Federal Unemployment Tax (FUTA): FUTA is a federal tax that employers pay to fund unemployment benefits for workers who lose their jobs. It is not related to Social Security benefits.
Clarify who pays FUTA: FUTA is paid solely by employers and is not withheld from employees' wages. Employees do not contribute to FUTA.
Examine the role of states in FUTA: While states administer unemployment benefits, FUTA tax rates are determined at the federal level, not by individual states.
Eliminate incorrect statements: FUTA is not used to fund Social Security benefits, and it is not withheld from employees' wages. Additionally, FUTA tax rates are federally determined, not state-specific.
Identify the correct statement: Based on the analysis, the correct statement is that FUTA is paid solely by employers and not by employees.
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