Reference no: EM131038174

PAYROLL ACCOUNTING STUDENT POST

All employees of the United States are required to pay Social Security taxes, regardless of their citizenship or residence.

The components of Social Security Taxes are Old age, Survivors, and Disability Insurance. Also known as OASDI, these are some of the requirements for qualification.

Any United States employee that can meet the qualifications will benefit from Social Security.

In 1935 the Social Security Act was signed by President Franklin D. Roosevelt, this act was to assist persons with a disability, old age, or unemployment due to the Great Depression.

Over the years there have been a lot of changes to the Social Security Act to help benefit people. One of the biggest issues was that the payments were not enough. Congress approved the established automatic cost-of-living adjustments (COLA's) in 1972. This is measured by the Consumer Price Index.

COMPUTER FOCUSED PRINCIPLES STUDENT POST

Adjusting entries are accounting journal entries that convert a company's accounting records to the accrual basis of accounting. An adjusting journal entry is typically made just prior to issuing a company's financial statements.

To demonstrate the need for an accounting adjusting entry assume that a company borrowed money from its bank on December 1, 2015 and that the company's accounting period ends on December 31. The bank loan specifies that the first interest payment on the loan will be due on March 1, 2016. This means that the company's accounting records as of December 31 do not contain any payment to the bank for the interest the company incurred from December 1 through December 31. (the loan is costing the company interest expense every day, but the actual payment for the interest will not occur until March 1.) For the company's December income statement to accurately report the company's profitability, it must include all of the company's December expenses-not just the expenses that were paid. For the company's balance sheet on December 31 to be accurate, it must report a liability for the interest owed as of the balance sheet date. An adjusting entry is needed so that December's interest expense is included on December's income statement and the interest due as of December 31 is included on the December 31 balance sheet. The adjusting entry will debit Interest Expense and credit Interest Payable for the amount of interest from December 1 to December 31.