Answered: The employer must book a liability for…

The employer must book a liability for compensated absences that have been earned, vest and carry forward True or false.

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter19: Accounting For Post Retirement Benefits

Section: Chapter Questions

Problem 10MC

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The employer must book a liability for compensated absences that have been earned, vest and carry forward

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Under what conditions must an employer accrue a liabilityfor the cost of compensated absences?
An employee has the right to receive compensation for future paid leave, and the payment of compensation is probable. If the obligation relates to rights that vest but the amount cannot be reasonably estimated, the employer should a. Accrue a liability with proper disclosure. b. Not accrue a liability nor disclose the situation. c. Accrue a liability; however, the additional disclosure is not required. d. Not accrue a liability; however, disclosure is required
Which of the following criteria is not required for the recognition of a liability for compensated absences? The amount of the obligation must be estimable. Payment of the obligation will require the use of current assets. Payment of the obligation must be probable. The compensation either evsts with the employee ir can be carried forward to subsequent years.
Under what circumstances should an employer accumulate a cost and the associated obligation for an employee's future absence compensation? What role does firm tradition and practice have in the accrual decision?
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Employer of a self-employed or independent contractor do not have to withhold CPP, EI and taxes from the gross pay. True False
Under what conditions should an employer accrue an expense and the related liability for employees’ compensation for future absences? How do company custom and practice affect the accrual decision?
Which of the following amounts paid by an employer to an employee is not subject to withholding? Oa. Salary Ob. Travel expense reimbursements from an accountable plan Oc. Commissions UE Od. Bonus Oe. All of these choices are subject to withholding.
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With relation to the acknowledgment of employee benefits, which statement is false? A. The payment due in return for services provided by workers during the period is the cost to be recognized in the period for post- employment benefits. B. Rather than when the benefit is paid or payable, the cost of providing employee benefits should be recognized in the period during which the benefit is received by the employee. C. In the case of short-term employee benefits, the undiscounted amount of the benefits anticipated to be paid in relation to the service provided by workers in a period should be recorded in that period. d. The business should acknowledge the estimated cost of service years. Of profit-sharing and incentive payments when, and only when, it has a legal or constructive responsibility to do so because of previous events and a trustworthy estimation of the probable cost can be formed.