1)Short-term employee benefits include all of the following except 

a) Wages, salaries and social security contributions

b) Short-term compensated absences
c)Profit-sharing and bonuses payable in more than twelve months after the end of the period in which
the employees render the related service.
d) Nonmonetary benefits for current employees, such as medical care, housing, car and free and
subsidized goods.

2) Which is not a characteristic of short-term employee benefits?

a) No actuarial assumptions are required to measure the benefit obligation.

b) There is no possibility of any actuarial gain or loss.
c) Short-term employee benefits by definition are payable no later than twelve months after the end of
the current period.
d) Short term employee benefits obligations are measured on a discounted basis

3) These are compensated absence that are carried forward and can be used in future periods and the
employees are entitled to a cash payment for unused entitlement on leaving the entity.

a) Accumulating and vesting

b) Accumulating and nonvesting
c) Nonaccumulating and vesting
d) Nonaccumulating and nonvesting

4) Postemployment employee benefits include all of the following, except

a) Long-term disability benefits 

b) Retirements benefits, such as pensions
c) Postemployment life insurance
d) Postemployment medical care
5) Under a defined contribution plan: I. The entity’s legal or constructive obligation is limited to the
amount it agrees to contribute to the fund. II. The entity’s obligation is to provide the agreed benefits to
current and former employees

a) I only
b) II only
c) Both I and II
d) Neither I nor II
6) It is benefits plan under which an entity pays a fixed contribution into a separate fund and will have
no legal or constructive obligation to pay further contribution if the fund becomes insufficient to pay
employee benefits.

a) Postemployment benefit plan

b) Defined contribution plan
c)Defined benefit plan
d) Multi-employer plan
7) Which of the following statements incorrect concerning the recognition and measurement of a
defined contribution plan?

a) The contribution shall be recognized as expense in the period it is payable

b) Any unpaid contribution at the end of the period shall be recognized as accrued liability.
c) Any excess contribution shall be recognized as prepaid expense but only to the extent that the
prepayment will lead to a reduction in future payments or cash refund.
d) An entity shall not disclose the amount recognized as expense for a defined contribution plan.
8) These are employee benefits that are payable as a result of an entity’s decision to accept voluntary
redundancy in exchange for those benefits 

a) Termination benefits

b) Short-term benefits

c) Long-term benefits

d) Postemployment benefits

9) An entity contributes to an industrial pension plans that provides a pension arrangement for its
employees. A large number of other employers also contribute to the pension plan and the entity makes
contribution in respect of each employee. These contributions are kept separate from corporate assets
and are used together with any investment income to purchase annuities for retired employees. The
only obligation of the entity is to pay the annual contribution. This pension scheme is 

a) Multiemployer plan and a defined contribution scheme

 
b) Multiemployer plan and define benefit scheme
c) Defined contribution plan only
d) Defined benefit plan only
10) An entity’s employees are each entitled to 20 days of paid holiday leave per calendar year. Unused
holiday leaves cannot be carried forward and does not vest. The holiday leave is
a) A short-term employee benefits
b) A postemployment benefits
c) Other long-term employee benefit
d) A termination benefits
11) An entity’s employees are entitled to 10 days holidays 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) A short-term employee benefit 
b) A postemployment benefit
c) Other long-term employee benefit
d) A termination benefit
12) An entity made a public announcement of its commitment to a voluntary redundancy plan. The
entity has an obligation to pay employees that choose voluntary redundancy a lump sum equal to
employees that choose voluntary redundancy is
a) A short-term employee benefit
b) A postemployment benefit
c) Other long-term employee benefit
d) A termination benefit
12) An entity reimburses 50% of past employee’s postemployment medical costs if the employee
provides 25 years of service or more to the equity. The obligation to pay 50% of qualifying past
employees postemployment medical cost is

a) A short-term employee benefit

b) A postemployment benefit
c) Other long-term employee benefit
d) A termination benefit
13) A profit-sharing plan requires an entity to pay a specified proportion of its cumulative profit for five-
year period to employees who serve throughout the five-year period. The profit-sharing plan is
a) A short-term employee benefit
b) A postemployment benefit
c) Other long-term employee benefit
c) A termination benefit

14) A profit-sharing plan requires an entity to pay specified proportion of its cumulative profit for the
year to employees who serve the entity throughout the year.  *

A short-term employee benefit

A postemployment benefit

Other long-term employee benefit

A termination benefit

15) An employment’s obligation for postretirement health benefits that are expected to be provided to
an employee must be fully accrued by the date the  

Employee is fully eligible for benefits

Employee retires
Benefits are utilized
Benefits are paid

16) Which statements characterizes defined contribution plans?  

They are more complex in construction than defined benefits plan

The employer’s obligation is satisfied by making the appropriate amount of periodic contribution

The investment risk is borne by the employer

Contributions are made in equal amount by employer and employees.

17) Which of the following statements characterizes defined benefits plans?  

They are comparatively simple in construction and raise few accounting issues for employees.
Retirement benefits are based on the plan’s benefits formula

Retirement benefits depend on how well pension fund assets are managed

All of the above.

 
18) The report of a defined contribution plan shall contain: I. A statement of net assets available for
benefits II. A description of the funding policy  

I only

II only

Both I and II

Either I or II

 
19) In rare circumstances, when a retirement benefits plan has attributes of both defined contribution
plan and defined benefits plan, it is deemed *

Defined benefits plan

Defined contribution plan

Neither defined benefit plan nor defined contribution plan

Either defined benefit plan or defined contribution plan

 
20) It refers to a plan where plan assets, if any, are retained and managed by the employer. *

Funded plan

Non-contributory plan

Unfunded plan

Delicate plan

 
21) These are pool of assets contributed by various unrelated employers to be used to pay retirement
benefits to participants without regard to the identity of the contributing employers. 

Multi-employer plans
State plans
Pooling of assets plan
Secret plan
 
22) Multi-employer plans are treated as 

Defined contribution plan

Defined benefit plan

Hybrid plan

Define contribution plan or defined benefit plan  

23) These are established by legislation and are operated by a government agency which is not subject
to control or influence by the reporting entity. *

State plans

SSS

GSIS

Puro plan 

 
24) State plans are 

accounted for as defined contribution plan

accounted for as defined benefit plan

accounted for in the same way as multi-employer plans

accounted for only by the Commission on Audit

 
25) The accounting for defined contribution plan

is straightforward – actuarial computations are not required.

is complex – actuarial computations are required

is simple – not accounted for

is done only by CPAs

 
26) Under a defined contribution plan, the retirement benefits expense is 

equal to an actuarially determined amount

equal to the agreed periodic contribution to the fund

equal to the contribution made during the period

zero, if no employee retired during the period

 
26) Employee benefits are all forms of consideration given by an entity in exchange for service rendered
by employees. Which of the following employee benefits is not within the scope of PAS 19?  

Short-term
Termination
Post-employment
Share-based payments
Other long-term

 
27) Which of the following employee benefits is not within the scope of PAS 19? 

Semi-monthly salaries of employees

Employer’s share in SSS contributions
One sack rice allowance
Bonus in the form the entity’s shares

 
28) Accumulating compensated absences are those that 

can be carried over to the next period if not fully used during the year of entitlement.

expire if not fully used during the year of entitlement.

can be carried over to the next period if not fully used during the year of entitlement and are paid in
cash when the employee leaves the company

are recognized only when actually taken by employees

PROBLEM SOLVING 
1) All of Gold Company’s Employees are entitled to two weeks of paid vacation for each full year in
Gold’s employ. Unused vacation time can be accumulated and carried forward to succeeding years and
will be compensated at the salary in effect when the vacation is taken. Silver started her employment
with Gold on January 1, 2008. As December 31,2014, when Silver’s salary was P5,000 per week. Silver
had used 10 weeks of her accumulated vacation time. In December 2014, Silver notified Gold of Silver’s
intention to use her accumulated vacation weeks in June 2015. Gold regularly scheduled salary
adjustment in July of each year. Gold properly did not deduct for unused vacation on Silver’s 2014
income tax return. How much Gold report as a liability should at December 31, 2014 for Silver’s
accumulated vacation time? 
 
2) Apex Company’s Employees earn two weeks of paid vacation for each year of employment. Unused
vacation time can be accumulated and carried forward succeeding years and will be paid at the salary in
effect when the vacation taken. As of December 31,2014, when Paul’s salary was P6,000 per week. Paul
had earned 18 weeks’ vacation time and had used 12 weeks of accumulated vacation time. At December
31,2014, how should Apex carry as a liability for Paul’s accumulated vacation time? 
 

 
3) On January 1,2011, Break Company agreed to grant its employee ten wasted vacation days each year,
with the provision that vacation days earned in a particular year could not be taken until the following
year. For the year ended December 31,2011, all ten of Break’s employees earned P300 per day each and
earned ten vacation days each. These vacation days were taken during the first half of 2012. Wage rates
remained the same for 2012. In Break’s 2011 profit or loss, how much expense should be reported for
compensated absences? 

4) Strand, Inc. provides an incentive compensation plan under which president receives a bonus equal to
10% of the corporation’s income in excess of P600,000 before income tax but after deduction of the
bonus. If income before income tax and bonus P1,920,000 and the tax rate is 32% the amount of the
bonus would be 120,000
 
5) The last payday for a firm was December 27 on which it paid ₱40,000 to its employees, the amount
earned by employees through the pay period ending December 16. For the period December 17 through
December 31, the employees earned ₱12,000.The adjusting entry required at December 31 would
include: *

cr. crash ₱12,000

dr. wages payable ₱12,000

dr. wages expense ₱12,000

dr. wages expense ₱40,000

 
6) ANOMALOUS IRREGULAR Co. grants its employees twelve days paid vacation leave each year. Per
ANOMALOUS’s policy, employees are required to take vacation leave each year, but not necessarily for
their entire vacation leave entitlement. Vacation leaves not taken during a year can be carried over
indefinitely. ADHERE has 500 employees with an average salary of ₱4,000 per day. The average annual
pay increase is 5%. During 20x1, total vacation leaves taken by employees were 5,400 days. Based on
past experience, 90% of unused vacation leave for a year are taken in the immediately following year. If
unused vacation leaves vest, how much should ANOMALOUS accrue as liability for unused vacation
leave on December 31, 20x1? 

 
7) ADHERE TO STICK Co. grants its managerial employees bonus in the form of profit sharing.
Information on operations in 20x1 is shown below: Profit before tax - ₱4,000,000 Bonus rate or
percentage - 10% Income tax rate - 30%. How much is the bonus “before bonus and before tax? 400,000

 
 
8) ADHERE TO STICK Co. grants its managerial employees bonus in the form of profit sharing.
Information on operations in 20x1 is shown below: Profit before tax - ₱4,000,000 Bonus rate or
percentage - 10% Income tax rate - 30%. How much is the bonus “after bonus and before
tax?” 363,636  
9) ADHERE TO STICK Co. grants its managerial employees bonus in the form of profit sharing.
Information on operations in 20x1 is shown below: Profit before tax - ₱4,000,000 Bonus rate or
percentage - 10% Income tax rate - 30%. How much is the bonus “before bonus and after tax? 288,660
 
 
10) ADHERE TO STICK Co. grants its managerial employees’ bonus in the form of profit sharing.
Information on operations in 20x1 is shown below: Profit before tax - ₱4,000,000 Bonus rate or
percentage - 10% Income tax rate - 30%. 261,682

 
11) receives a bonus equal to 10% of ARTIFACT’s profit before tax but after deduction of the bonus.
ARTIFACT’s profit after tax and after bonus for the year is ₱2,545,456. Income tax rate is 30%. How much
is the bonus? 

 
 
12) AMNESTY PARDON Co. has a post-employment benefits plan that is considered as defined
contribution plan. According to the plan, AMNESTY agrees to contribute ₱800,000 annually to a
retirement fund for the benefit of its employees. On December 31, 20x1, because of poor results of
operations and insufficient working capital, AMNESTY was only able to contribute ₱320,000 to the fund.
On December 31, 20x2, because of a profitable year, AMNESTY decided to contribute ₱1,800,000 to the
retirement fund. On January 12, 20x3, an employee retired and was eligible to a ₱60,000 retirement
benefits based on the operating efficiency and investment earnings of the fund. How much is the
retirement benefits expense recognized in 20x2? 800,000

  
13) AMNESTY PARDON Co. has a post-employment benefits plan that is considered as defined
contribution plan. According to the plan, AMNESTY agrees to contribute ₱800,000 annually to a
retirement fund for the benefit of its employees. On December 31, 20x1, because of poor results of
operations and insufficient working capital, AMNESTY was only able to contribute ₱320,000 to the fund.
On December 31, 20x2, because of a profitable year, AMNESTY decided to contribute ₱1,800,000 to the
retirement fund. On January 12, 20x3, an employee retired and was eligible to a ₱60,000 retirement
benefits based on the operating efficiency and investment earnings of the fund. How much is the
retirement benefits expense recognized in 20x3? *