Accrued wages payable and payroll taxes payable differ in that:

• A. Accrued wages payable records wages earned but not yet paid; payroll taxes payable are taxes due to authorities related to payroll.
• B. Payroll taxes payable record wages earned but not paid; accrued wages payable are taxes due to authorities.
• C. Both are assets; no difference.
• D. Accrued wages payable is a liability to suppliers; payroll taxes payable is a liability to employees.

Answer: (A)

The idea being tested is how wages owed to employees differ from payroll taxes owed to authorities. Accrued wages payable records wages that have been earned by employees but have not yet been paid by period end, creating a liability to employees. Payroll taxes payable, by contrast, are amounts owed to government authorities for payroll-related taxes (including employee withholdings and the employer’s payroll tax obligations), not to the employees. So wages earned but not yet paid vs. taxes due to authorities are fundamentally different obligations. The other options either misstate who is owed (taxes vs. wages), treat these as assets, or misidentify the nature of the liability (to suppliers or to employees).