Question

Question 8 of 10

A payroll register lists the total current period earnings as $40,500. It lists the
total withholdings and deductions as $10,540. When the payroll journal
entries are posted to the general ledger, how is the Cash account affected?
A. It is decreased by a $10,540 debit.
B. It is increased by a $40,500 credit.
C. It is increased by a $51,040 debit.
OD. It is decreased by a $29,960 credit.
SUBMIT

Answer 1

Answer: D. It is decreased by a $29,960 credit

Step-by-step explanation:

Answer 2

When payroll journal entries are posted to the general ledger, the Cash account is decreased by a credit of $29,960 (the difference between $40,500 and $10,540). This is because the total earnings of $40,500 are recorded as a debit to an expense account (such as Salaries and Wages Expense), while the total withholdings and deductions of $10,540 are recorded as a credit to a liability account (such as Payroll Taxes Payable). The net amount of $29,960 ($40,500 - $10,540) represents the actual cash paid out by the company for payroll expenses