Under ASC 710-10-25-1, an employer shall accrue aliability for employees' compensation for futureabsences if all the following conditions are met:I. The employer's obligation relating to employees'rights to receive compensation for future absences isattributable to employees' services alreadyperformed.II. The paid absence can be taken in a later year-thebenefit vests (will be compensated even ifemployment is terminated) or the benefit can beaccumulated over time.III. Payment of the compensation is probable.IV. The amount can be reasonably estimated.If the amount cannot be reasonably estimated,None of the other answers is correct.O There is no need to disclose it.The employer shall accrue a liability in balancesheet.The employer shall disclose it in the notes tofinancial statements.

A liability shall be accrued if it is to be settled in the near future.

Answered: liability for employees' compensation…

Business

Accounting

liability for employees' compensation for future

Income Tax Fundamentals 2020

38th Edition

ISBN:9780357391129

Author:WHITTENBURG

Publisher:WHITTENBURG

Chapter9: Payroll, Estimated Payments, And Retirement Plans

Section: Chapter Questions

Problem 5MCQ

See similar textbooks

Related questions

Q: Determine the employee benefit expense for the current year, remeasurement related to the defined…

A: A journal entry is a form of accounting entry that is used to report a business transaction in a…

Q: How to determine the estimated net cost of benefits to the employer?

A: In an organizational setting, when business activities are carried out it results in some benefits…

Q: What payroll taxes is the employer responsible for paying?

A: Employer payroll taxes: The taxes which the employer must pay to the employees with their salaries…

Q: Under the FLSA, what information concerning employees' wages earned must be maintained by the…

A: Payroll Register: Payroll register is a schedule maintained by the company to record the earnings,…

Q: How should an employer's commitment for employee benefits be calculated, according to AASB 119

A: Definition: In the context of employee benefits, this refers to all types of consideration offered…

Q: Under what conditions must an employer accrue a liabilityfor the cost of compensated absences?

Q: Regarding TSAS and 457(b) deferred compensation plans, both plans require contracts between an…

A: Deferred Compensation Plan : It refers to that plan under which employees defer Compensation earned…

Q: Define Employee discounts.

A: Discount: It is a portion of money that is deducted from the selling price of a product or a…

Q: How do I account for an advance to an employee and the resulting deduction?

A: An advance to employee means to pay the salary or money to such employee before the due date.

Q: Sick pay benefits that are related to an employee's services already rendered, whose payment is…

A: Accumulate rights: Accumulate rights refer to those rights which can be carried forward to future…

Q: a defined contribution plan, as long as the employer makes a definite contribution to the plan, the…

A: Defined contribution plan is a plan opted for providing employee benefits at the end of retirement…

Q: Why are deductions made by an employer from the employees' earnings/pay classified as liabilities to…

A: AN EMPLOYER HAS THE RIGHT TO MAKE DEDUCTION'S FROM EMPLOYEE'S EARNINGS OR PAY . THESE DEDUCTIONS CAN…

Q: proper plan

A: The obligation for collecting and remitting withholding taxes to the Internal Revenue Service lies…

Q: Direct Compensation coverage.

A: The determinants of direct financial compensation can be classified into two categories, external…

Q: 1. Which statement is incorrect regarding recognition of employee benefits? a. For post-employment…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Why are deductions from employees’ earnings classified as liabilities for the employer?

A: Payroll: The total payment that a company is required to pay to its employee for the services…

Q: A liability for compensated absences such as vacations, for which it is expected that employees will…

A: The compensation expense is the expense for which liability is recorded on the basis of future…

Q: What purpose does the individual employee earnings record serve?

Q: Which payroll taxes are the employee’s responsibility and which are the employer’s responsibility?

Q: According to AASB 119, how should an employer's obligation for employee benefits be measured?

A: Employee benefits refer to the consideration of all forms that are given by an entity to its…

Q: Explain Employee benefit plans.

A: Tax: Tax refers to a compulsory payment or a contribution to the state revenue, levied by the…

Q: How to get the gross taxable compensation income?

A: Gross taxable compensation income: This is the amount that helps to know an individual, association…

Q: Employee benefits are all forms of monetary consideration given by an entity in exchange for…

A: IAS 19 Employee benefits relates to accounting of all the employee payments apart from share based…

Q: Do workers compensations statutes apply to seasonal or temporary workers? Explain

A: Definition: Worker’s compensation scheme: Worker’s compensation scheme is an arrangement that…

Q: What is an employer’s unemployment merit rating

A: Merit rating is a rating or a score given to the employer on the basis of the stability in…

Q: The vested benefits are employee benefits that are not conditional on future employment. benefits…

A: Solution: The vested benefits are "employee benefits that are not conditional on future employment."…

Q: In a defined contribution plan, as long as the employer makes a definite contribution to the plan,…

A: Defined-contribution plans are funded primarily by the employee. But many employers make…

Q: Determine the total employee withholdings

Q: retirement benefits offered by government for employees in detail.

A: A pension or retirement plan is an employee benefit that commits the employer to make regular…

Q: When would it be considered that income has arisen in relation to employee benefits?

A: The benefits or perks that are being offered to and given to the employees in addition to their…

Q: FRS119 Employee Benefits prescribes the accounting and disclosure requirements by employers for…

A: IFRS: IFRS stands for International Financial Reporting Standards. These accounting standards are…

Q: Please explain the tax implications of compensation in the form of salary and wages from the…

A: SOLUTION COMPENSATION IN THE FORM OF SALARY AND WAGES : COMPENSATION REFER TO THE CASH PRIZES THAT…

Q: Under what conditions should an employer accrue an expense and the related liability for employees’…

A: Accrued Liabilities: Accrued liabilities are those expenses that are incurred but not yet paid.

Q: Which of the following is not deducted from an employee’s salary? a. FICA taxes.b. Unemployment…

A: Payroll tax The costs incurred by an employer to pay the employee for his labor, including other…

Q: a. MFRS119 Employee Benefits prescribes the accounting and disclosure requirements by employers for…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Which of the following is an indicator that an employee benefit is provided in exchange for…

A: The question is related Employee benefits. As per employee benefits It requires recognition of the…

Q: a "asset gain or loss" in the context of pension accounting? What is the development of a "liability…

A: Plan assets: Assets are created, maintained and planned in a specific purpose. The contribution of…

Q: QUESTION 5 a. MFRS119 Employee Benefits prescribes the accounting and disclosure requirements by…

A: The objective of MFRS 119 is to prescribe the accounting and disclosure for employee benefits. The…

Q: Under what circumstances should an employer accumulate a cost and the associated obligation for an…

A: Introduction: Accrued Liabilities: These are expenses that have been incurred but not yet paid.

Q: What is an ‘employee benefit’ and what are the various forms that these benefits can take?

A: Such benefits which are given either in monetary forms or non-monetary forms to the employee in…

Q: Under PAS 19, employee benefits are alloforms of consideration given by an entity in exchange for…

A: The question is based on the concept of Accounting Standard on Employee Benefits.

Q: What method should be used to account for profits or losses associated with pension plan assets?…

A: The Answer

Question

Under ASC 710-10-25-1, an employer shall accrue a
liability for employees' compensation for future
absences if all the following conditions are met:
I. The employer's obligation relating to employees'
rights to receive compensation for future absences is
attributable to employees' services already
performed.
II. The paid absence can be taken in a later year-the
benefit vests (will be compensated even if
employment is terminated) or the benefit can be
accumulated over time.
III. Payment of the compensation is probable.
IV. The amount can be reasonably estimated.
If the amount cannot be reasonably estimated,
None of the other answers is correct.
O There is no need to disclose it.
The employer shall accrue a liability in balance
sheet.
The employer shall disclose it in the notes to
financial statements.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

The accrual of a liability

VIEW

Facts of the case

VIEW

Answer

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

What are examples of involuntary deductions employers are required to collect for employee and employer payroll liabilities?
Under IAS 19 on Employee Benefits, which of the following terms best describes other long-term employee benefits a. Benefits not falling due wholly within twelve months of the end of the period in which the service is rendered. b. Benefits which are payable after completion of employment c. Benefits payable as a result of an entity's decision to end an employment before the normal retirement care. d. Benefits which fall due within twelve months of the end of the period in which the service is rendered.
) For 2021; An employer may provide an employee with a reimbursement of up to _________ of qualified education expense without including any of that payment as income to the employee. A. 3650 B. 4200 C. 10500 D. The entire amount is income to the employee
An employer's obligation for post-retirement benefits that are expected to be provided to an employee must be fully accrued by the date the a. Benefits are utilized b. Employee is fully eligible for benefits c. Employee retires d. Benefits are paid
The entity’s monthly contributions to the SSS for the benefit of its employees are accounted for as defined benefit plans. a. True b. False According to PAS 19, contributions to a defined contribution plan are recognized a. at each year-end b. where an employer makes those contributions c. when an employee has rendered service in exchange for those contributions d. at the beginning of each reporting period
The vested benefits are employee benefits that are not conditional on future employment. benefits to be paid to the retired employees in the subsequent year benefits accumulated in the hands of a trustee benefits to be paid to the retired employees in the current period
According to PAS 19, contributions to a defined contribution plan are recognized a. at each year-end b. when an employer makes those contribution c. when an employee has rendered service in exchange for those contributions d. at the beginning of each reporting period
1. Which of the following items is normally NOT assessable under salaries tax? a. Payment in lieu of notice to an employee who has been dismissed without adequate notice given by the employer. b. Tuition fee paid by an employer for an employee's children, where the employer has entered into the relevant contract with the school directly. c. Reimbursement of medical expenses of an employee by an employer pursuant to the terms provided in the employment contract. d. Lump sum payment to a resigning employee in consideration of his not engaging in the same industry for two years. 2. Henry Ltd is carrying on business in Hong Kong. It acquires funding from various sources in Hong Kong and makes investment in securities listed in overseas markets. Henry Ltd's directors carry out investment analysis in Hong Kong and instruct its overseas agents to execute the orders of purchase and sale in the overseas stock exchange. During the year 2020/21, $10 million profits were derived from…
All the listed benefits paid by an employer are required to be included in an employee's income for a tax year except one. Which one? Question 4 options: a) Tuition fees for training that relates to employer's work b) Medical expenses of an employee c) Forgiveness of employee debt d) Cost of life insurance
All of the following income items are includible in an employee's gross income except: a, Severance pay for cancellation of employment b, Unemployment compensation c, Payments from employer while sick or injured d, Medical insurance premium paid by employer for employee and spouse e, Moving expense reimbursement
The employees are entitled to 10 days holiday leave per calendar year. Unused holiday leave may be carried forward until the employee leaves the employment of the entity, at which time the entity will pay the employee for all unused holiday leave. The holiday leave is. a termination benefit a postemployment benefit a short-term employee benefit other long-term employee benefit
The wage base for unemployment compensation taxes are: a. all wages paid but not including those that have been set aside for the employee to draw upon at his/her discretion. b. all wages actually paid or constructively paid. c. all wages paid or payable for the period. d. all wages that are considered to be constructively paid plus wages payable.