Practice: Employee Compensation & Pensions Quiz Quiz | Financial Accounting & Reporting (FAR)

Question 1

When should employee compensation expense generally be recognized under U.S. GAAP?

Answer

When cash is paid to employees

Answer

When employees earn the compensation by providing services

Answer

At the end of the fiscal year only

Answer

When tax deductions are claimed

Question 2

Which of the following is considered short-term employee compensation?

Answer

Salaries and wages payable within one year

Answer

Defined benefit pension obligations

Answer

Postretirement healthcare benefits

Answer

Long-term stock appreciation rights

Question 3

A liability for compensated absences should generally be recognized when:

Answer

Employees request vacation time

Answer

Employees actually take vacation

Answer

The company pays the vacation benefits

Answer

The benefits vest or accumulate, payment is probable, and the amount can be reasonably estimated

Practice Quiz