Which term is defined as SS TAX?

Which term is defined as SS TAX?

• A. FICA
• B. Equities
• C. Current Ratio
• D. Accrued interest payable

Answer: (A)

SS tax refers to the payroll tax that funds Social Security. In the United States, this tax is collected under the Federal Insurance Contributions Act, abbreviated FICA. So the term that defines SS TAX is FICA. FICA covers both Social Security and Medicare taxes—the Social Security portion is 6.2% of earned income up to the wage base, and the Medicare portion is 1.45% of all earned income (with an additional 0.9% surtax for higher incomes). Employers and employees each pay their share, and together these amounts constitute the total FICA tax. Other terms don’t describe Social Security tax: equities relate to stocks, the current ratio is a liquidity metric, and accrued interest payable is a liability for interest that's accrued but not yet paid.

SS tax refers to the payroll tax that funds Social Security. In the United States, this tax is collected under the Federal Insurance Contributions Act, abbreviated FICA. So the term that defines SS TAX is FICA. FICA covers both Social Security and Medicare taxes—the Social Security portion is 6.2% of earned income up to the wage base, and the Medicare portion is 1.45% of all earned income (with an additional 0.9% surtax for higher incomes). Employers and employees each pay their share, and together these amounts constitute the total FICA tax. Other terms don’t describe Social Security tax: equities relate to stocks, the current ratio is a liquidity metric, and accrued interest payable is a liability for interest that's accrued but not yet paid.