Accounting : Current Liabilities and Payroll Accounting
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Example Question #1 : Current Liabilities And Payroll Accounting
All of the following conditions except which of the following must be met in order for an employer to accrue liability for employee compensation for future absences?
The employer's obligation is related to employee's rights to receive compensation for previous absences is attributable to the employee's services already rendered
The obligation relates to rights that vest or accumulate
The employer's obligation is related to employee's rights to receive compensation for future absences is attributable to the employee's services already rendered
Payment of the compensation is probable
The employer's obligation is related to employee's rights to receive compensation for previous absences is attributable to the employee's services already rendered
In relation to compensated absences, the knowledge of the conditions that must be met in order to accrue loss contingency is helpful in accounting for compensated absences such as vacation, sick pay, and leave. In order for an employer to accrue liability for employee's compensation for future absences, several conditions must be met. These conditions include the following: the employer's obligation is related to employee's rights to receive compensation for future absences is attributable to the employee's services already rendered; the obligation relates to rights that vest or accumulate; payment of the compensation is probable; and the amount can be reasonably estimated.
Example Question #2 : Current Liabilities And Payroll Accounting
All of the following conditions except which of the following must be met in order for an employer to accrue liability for employee compensation for future absences?
The employer's obligation is related to employee's rights to receive compensation for future absences is attributable to the employee's services already rendered
The employer's obligation is related to employee's rights to receive compensation for previous absences is attributable to the employee's services already rendered
The obligation relates to rights that vest or accumulate
Payment of the compensation is probable
The employer's obligation is related to employee's rights to receive compensation for previous absences is attributable to the employee's services already rendered
In relation to compensated absences, the knowledge of the conditions that must be met in order to accrue loss contingency is helpful in accounting for compensated absences such as vacation, sick pay, and leave. In order for an employer to accrue liability for employee's compensation for future absences, several conditions must be met. These conditions include the following: the employer's obligation is related to employee's rights to receive compensation for future absences is attributable to the employee's services already rendered; the obligation relates to rights that vest or accumulate; payment of the compensation is probable; and the amount can be reasonably estimated.
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