Each time a payroll is recorded, a General Journal entry should also be made to record the employer's CPP and EI amounts payable.Group startsTrue or False

Answer: True

When payroll is recorded, it is essential to create a General Journal entry to not only capture the wages paid to employees but also to account for associated employer liabilities such as Canada Pension Plan (CPP) and Employment Insurance (EI) amounts payable. This process ensures that all financial obligations related to employee compensation are accurately reflected in the company's accounting records.

Explanation:

1. Employer's Obligations: Employers are required by law to contribute to the CPP and EI on behalf of their employees. These contributions are considered liabilities until they are paid to the government.

2. General Journal Entry: The General Journal serves as the primary accounting record for all transactions. When completing payroll, it is critical to record not just the gross pay but also the employer's share of CPP and EI. This entry maintains the integrity of the company's financial statements by ensuring that the appropriate liabilities are recognized.

3. Accurate Financial Reporting: Keeping accurate records through proper journal entries mitigates risk and ensures compliance with payroll regulations. It also helps in preparing accurate financial statements, which reflect true financial health.

In summary, for every payroll recorded, it is indeed true that a corresponding journal entry should be made to account for the employer's CPP and EI amounts payable. This practice is fundamental in accounting for payroll expenses and liabilities.