| | | Questions |
| | 1 | Imagine you are an employer (an awesome one). When should you recognize short- term employee benefits? |
| | | a | Every 1st day of the month |
| | | b | Every 15 th and 30 th of the month |
| | | c | When the employees have rendered service in exchange for the employee benefits |
| | | d | Never |
| | 2 | You are the business owner of Entity A. You have 10 employees, each earning 20.000 per month |
| | | You pay salaries on a bi- monthly basis. During the month of April 2021, none of your employees |
| | | were absent, late or have rendered overtime service. When will you recognize the salaries expense (ant at what amount) for the first payday |
| | | in the month of April 2021? |
| | | Timing of recognition | | | | Amount recognized |
| | | a. April1 | | | | 20,000 |
| | | b. April 15 | | | | 20,000 |
| | | c. April 1 | | | | 100,000 |
| | | d. April 15 | | | | 100,000 |
| | 3 | Entity A has 20 employees who are each entitled to one day paid vacation leave for each month of service rendered. |
| | | Unused vacation leaves cannot be carried forward and are forfeited when employees leave the entity. All the |
| | | employees have rendered service throught the current year and have taken a total of 150 days of vacation |
| | | leaves. The average daily rate of the employees in the current period is 1.000. |
| | | However a 5% increase in the rate is expected to take into effect in the following year. Based on Entity A´s past experience, |
| | | the average annual employee turnover rate is 20%. How much will entity A accrue at the end of the current year for unused |
| | | entitlements? |
| | | a | 0 |
| | | b | 150,000 |
| | | c | 90,000 |
| | | d | 94,500 |
| | 4 | Under a profit sharing plan, Entity A agrees to pay its employees 5% of its annual profit. The bonus shall be divided |
| | | among the employees currently employed as at year end . Relevant information follows: |
| | | Profit for the year | | | 8,000,000 |
| | | Employees at the beginning of the year | | | 8 |
| | | Average employees during the year | | | 7 |
| | | Employees at the end of the year | | | 6 |
| | | If the employee benefits remain unpaid, how much liability shall Entity A accrue at the end of the year? |
| | | a. | 400,000 |
| | | b. | 300,000 |
| | | c. | 200,000 |
| | | d | 0 |
fergamo
Exercisesemployeesaccruals1.xlsx
