Problem 10-33 Multiple choice (IFRS 16) 1 Under IFRS, a lessee is required to recognize a b 4. Neither right of use asset nor lease liability 2. The lessee may tof use a liability Tekoe llality but not right of use ence, what condition? a Short-term lease Low value lease Pee 8. A short-term lease is defined as & ¢ Twelve-month lease with a purchase option 4. Two-year lease with option to terminaty 4, Which statement is true about low value lease? 8 The value of an underlying asset is based on the value of the asset when new regardless of the age of the b. The term of a low value lease may be more thar © An underlying asset does not qualify as low velue lease ifthe nature of the asset is such that the asset Six months or less asset. twelve months. | typically not of low value when new. 5. A right of use asset is initially measured at b a Pair value Current cost Present value of expected cash inflows apply the operating lease model unde, pe cost of right of use asset compri bwing, except all of the ‘The present value of leave payments S Lease payments made to lessor on or be ‘commencement date tial. diect cost incurred by lesee A lessee with a lease containing @ purchase option that ssonably certain to be exercised should depreciate right of use asset over Lease term | Useful life of the asset or the lease term, whichever is shorter ‘Useful life of the asset or the lease term, which is longer lease liability is measured at The absolute amount of lease payments ‘The present value of fixed lease Fs ‘The fair value of the underlying asset ‘lease payments include all of the following, exept Fixed lease payments Brercise price of @ purchase option that is reasonably ‘ertain to be exercised Residual value guarantee of the lessee 367Problem 10-34 Multiple choice (LAA) 1. Which is not imeluded in lease payments? a. Any payment required by a purchase option Ay Baby certain tobe exercised” * » Ei eres on oe a hy once Required payments over the lease term 4. Amount guaranteed by a party related to the lessge 2 Which is mot part ofthe lease payments? |. The rental payments called for by the lease Any residual value guarantee of the ati b ny payment tk under a purch: option that is reasonably certain to be exercised 4. The lease payments include all of the following, excepe a. The residual vah D cost € The purchase option that it reasonably certain tobe 4d. Any payment that the lessee must make upon failure te extend or renew the lease 4. What is the cost of a right of use asset? ‘a. The absolute lease payments over the lease term b. The present value of the lease payments including executory costs discounted at an appropriate rate ate rate 4. The present value of the market value of the asset iscounted at an appropriate rate 5. The carrying amount of the right of use asset would be periodically reduged by ‘2. Total lease payment . Portion ofthe lease payment allocable to the interest . Portion of the lease payment allocable to reduction of the lease liabil pesca agi alae ig the treatment of initial direct cost incurred bY in a finance lease? d to the carrying amount of the right of use at he carrying the right of use asset of the following statements concerning residual iguarantee i8 appropriate for the lessee? ‘asset and related liability should be increased by ‘absolute amount of the residual value. ‘asset and related liability should be decreased ‘the absolute amount of the residual value ‘asset and related liability should be decreased falue of the residual value. present value 0 puting depreciation of a right of use asset under a ce lease, the lessee should deduct "An unguaranteed residual value and depreciate over “the lease term. “The residual value guarantee and depreciate over the ‘useful fe of the asset, "An unguaranteed residual value and depreciate over ‘the useful life of the asset, fair value of a underlying asset is greater than the guaranteed by the lessee lessor pays the lessee for the difference. ea gain atthe end of the lease rime rate essors published rate he lessee's average borrowingProblem 10-35 Multiple choice (AICPA Aday, ) ted) 1. The lessee’s lease liability for a finance lea, se periodically reduced by Would 4 i a. Lease payment plus the depreciation of the ase, et b. Lease payment less the depreciation of the ase, | co ‘Lease payment less the portion allocate oa d. Lease payment 2, A six-year finance lease entered into on December a1 | the current year specified equal annual lease paymer due on December 31 of each year. The first annuqi la aa payment paid on December 31 of the current of which of the following? a, panes expense . y c. Both interest expense and lease liability d. Neither interest expense nor lease liability i Year consist, | 3. A six-year finance lease specified equal annual lease _ payments. The lease payment in the fifth year applicable to the reduction of the lease liability should be a. Less than in the fourth year | b. spleessiemyiiestonetiaieas c. The same as in the sixth year d. More than in the sixth year i / 4, A lessee had a ten-year finance lease requiring equal | annual payments. The reduction of the lease liability Ba the second year should equal a Ts inhi a sdann te} b. feo current liability shown for the lease at the ent second year c. The reduction of the lease liability in the first yee" d. One-tenth of the original lease liability 37012-23 Multiple choice (IFRS) Problem 12-22 Multiple choice (AICPA Adaya, tion of a lease is normally carrie out the end of the lease term er a "cooling off” period of one year rt received in advance by the lessor in an 1. Rent Should be recognized a8 Fevenue ovens ‘ i a, When received b At the lease inception BUR pesca pected by the lease 2When should a lessor recognize in in nonrefundable lease bonus paid by a lessee? necessary tion of a lease as either operating or finance Bs on the part of lessor is based on come F Jease payments being at least 50% of fair value, economic life of the underlying asset. the following situations would prima facie lead to ‘being classified as a finance lease, except fer of ownership to the lessee. to purchase at a value below the fair value of ‘underlying asset. he lease term is for a m 12." Straight line basis over the lease term — '. Diminishing balance basis ¢. Sum of unite basis 4. Cash basis 4. Tn an operating leae that in recorded by the lessor, the Oe tae. pee ea ‘equal monthly rental payments should be of lease of land and building, paym a be split ‘a. Recorded as reduction of depreciation. b. Allocated between reduction in lease receivable and interest expense. ‘¢ Recorded as reduction in the lease receivable 4. Recorded as a rental income, — 5. Which statement characterizes an operating lease” ‘on the useful life of the two elements. ‘Using the sum of digits method. ‘According to method devised by the entity. there is «lease of land and building and the title ‘the land is not transferred, generally the lease is 4. The lessee records depreciation and interest. Bb. The lescee records a lease obligation . ©. The lessor transfers title of the underlying asset to i term.Problem 12-24 Multiple choice (IAA) L. The accounting concept that is principally useq leases into operating and finance on the part oh es Ot ig b. Prudence c. Neutrality d. Completeness 2. Which statement is correct regarding the le, capitalization criteria? . a. The lease transfers ownership to the lessor. lease contains a purchase option. h m is equal to a life of the underlying asset. d. The lease payments are at least 90% of fair value asset. 3. Which condition would require lease capitalization? a. The lease does not transfer title to the lessee. b. There is an uncertain purchase option. oT significantly more than the fair value of the asset. d. The lease term is below the useful life of asset. 4. One of the four determinative criteria for a finance lease specifies that the lease term be equal to or greater than a. The economic life of the underlying asset. b. 90 percent of the economic life of the asset. i nae d b0 peruentof the soe sige gery roe 5. One of the four determinative criteria for a finance lee is that the present value at the beginning of the le term of the lease payments equals or exceeds ir value rlying asset a b. e t e. 75 percent of the fair value of the underlying # d. 50 percent of the fair value of the underlying 414e wn 13-15 Multiple choice (IFRS) investment in the lease is equal to mance lease a wuing to the lessor. lease payments under a finance lease of the lessor. esent value of lease payments under a finance lease the Testor aa ny Unsuaranteed residual value sent Vi e lease pay ¢ Be he losaor. Payments under a finance investment in a direct financing lease is equal to . Cost of the asset r Cost of the asset minus guaranteed residual value _ Cost of the asset plus unguaranteed residual value sich is the correct accounting treatment for a finance in the accounts of a lessor? -“Noncurrent asset equal to net investment in lease and all finance payments in income statement. Receivable equal to gross investment in the lease and ‘all finance payments by reduction of debt. 2 investment in the lease and ze fina y Receivabl le equal to net ene in the lease and duction of debt. all finance payments by re ors shall recognize asset held under a finance lease #82 receivable at an amount equal to the Gross investment in the lease & Gross rental: ‘piss rentals. ether guaranteed or unguaranteed The lease receivable in a direct financing leat yyments. i t of lease pay? “£ The f lease pal ae | 4 the pcr rhe asset less any depreciation se is 4416. The primary difference between @ direct financing 1... and a sales type lease is the yy‘rental collections are recorde a. Manner in whicl . b. Depreciation recorded each year by the lessor c s @. Allocation of initial direct cost incurred by the lesgor 7. All of the following would be included in the lea, receivable, except a, Guaranteed residual value b. Unguaranteed residual value e. A purchase option that is reasonably certain Auf would be included 8. Under a direct financing lease, the excess of aggregate rentals over the cost of the underlying asset should be recognized as interest income of the lessor a. In increasing amounts during the term of the lease b. In constant amounts during the term of the lease ©. d. After the cost of the underlying asset has been fully recovered through rentals 5 9.In a direct financing lease, unearned interest income should be a b. Amortized over the lease term using straight line. a Ignored ; { |. Recognized at the lease expiration. 10. Which statement is true regarding initial direct cos! ling initial direct cos! incurred by the lessor? i a. Ina divect financing lease, initial direct cost shall } ‘ vat to the net investment in the lease. » In a sales type lease, initial direct cost shall b ; «. SxPensed as component of cost of goods sold. | ~ 1B an operating lease, initial direct cost incurred " lessor shall be deferred and allocated over the !#* 4. All of these statements are correct. 442paslem 1420 Multiple choice (IFRS) inder a sales type lease, what is t i Bee cis an eet he meaning of gross present value of lease payments p Absolute amount of lease payments Present value of lease ‘y Payments plus present valu f unguaranteed residual value s . H 4. Sum of absolute amount of lease payments and unguaranteed residual value 2.Net investment in a sales type lease is equal to a. Gross investment in the lease léss unearned finance income b. Cost of the underlying asset e. The lease payments d. The lease payments less unguaranteed residual value 4Which statement characterizes a sales type lease? a. The'lessor recognizes only interest revenue over the useful life of the asset. . b. The lessor recognizes only interest revenue over the lease term. and interest 4. The lessor recognizes and interest revenue a dealer profit at lease inception over the useful life of the asset. ance lease transaction for AThe i on a fin: Rs ore vs or dealers should lessors who are manufacture separately from finance income : eee eeanies ‘at the end of the lease term & Onh recognized A Be ee eet tat straight line basis over the lease term 471e recognized at the commencement oy 5. The sales renee ufacturer or dealer lessor ia the the lease by a mal a. Fair value of the asset b. Present value of the Jease payments payments, whi is | d. Fair value of the 188°_ or present value of the lease payments, W] ichever is higher. | ment of an unguaranteed residual value What is the treat goods. sold under a sales type in determining the cost of lease? ‘The unguaranteed residual value is ignored. ‘The unguaranteed residual value is added to the cas of the underlying asset. c. The unguaranteed residual value is deducted from the cost of the undeflying asset at absolute amount. a oP 7. The excess of the fair value of underlying asset at te inception of the lease over the carrying amount shall recognized by the dealer lessor as a. Unearned income from a sales type lease b. Unearned income from a direct financing lease ©. d. Manufacturer profit from a direct financing leas? 8. In a lease that is recorded we a a Jease bY lessor, interest revenue er . Does not arise ©. Bigrneiotss e recognized over the lease term usiné we straight line method tio” 4. Shall be recognized in full as revenue at the 9"? of the lease : 472poem 16-82 Multiple choice (PAS 12) is the deferred tax consequence attributable to a witfaple temporary difference, é tax liability fy Deferred tax asset Current tax liability q. Current tax asset pit is the deferred tax consequence attributable to a deductible temporary difference and operating loss carryforward. ». Deferred tax liability b tax asset ¢. Current tax liability d. Current tax asset g.lt is the amount of income tax payable in respect of taxable income. a, Current tax expense b. Total income tax expense c. Deferred tax expense a. Deferred tax benefit 4.It is the aggregate amount included in the determination of net income for the period in respect of current tax and deferred tax. a. Tax expense b. Current tax expense ¢. Deferred tax expense d. Deferred tax benefit © 5.The deferred tax expense is equal to a. Increase in deferred tax asset less increase in defei tax liability. . ; a 1, feferred tax Mt orred tax liability less increase in in deferred tax asset. c. Increase in deferred tax asset. 4. Increase in‘ deferred tax.liability. 555Problem 16-33 Multiple choice (IFRS) 1. An entity shal let a deferred tax asset and hak, When the taxes are levied by diferent taxing aug When the entity has no legal enforceabte nigh offeet. current tax aseet against a current tax liability 4. Under all circumstance: 2, Which is correct about deferred tax assets and lsbilitey a. Current deferred tax assets are nett urent deferred tex bilities ». All noncurrent deferred tax assets are netted agai noncurrent deferred tax liabilities. sy ¢. Deferred tax assets are never netted against defened tax liabilities 8. Which statement is incorreet concerning deferred tax? a b, Taxasset and liability shall presented separately from other assets and liabilities ©. Deferred tax asset and liability shall be distinguished a, om curent tax asset and liability. Deferred tex asset and liability shall be classified as noneurrent, . ted againsy ‘4 Allof the following must be disclosed separately, except ». The amount of deductible temporary differences for which no deferred tax asset is recognized s The amount of taxable temporery. differenti! associated with investments in subsidiaries and hich no deferred tax liability is recognized. {ammount of income tax relating to each compen! ‘other comprehensive income. 536 16-34 Multiple choice (AICPA Adapted) fication for the method of determining periodic tax expense is based on the concept of Matching of periodic expense 10 peviodie revenue. jectivity in the calculation of periodic expense. “Consistency of tax expense measurement with actual “tax planning strategies. of the following differences would result in future jble amount? Expenses or losses that are deductible after they are recognized in accounting income , Revenues or gains that are taxable before they are " recognized in accounting inco feats or gains that are recognized in accounting {income but re never included in taxable income temporary difference which would result in a deferred liability is Interest revenue on municipal bonds Subscription received in advance temporary difference which would result in a deferred asset is ‘Tax, penalty or surcharge Dividend received on share investment. s Excess tax depreciation over accounting depreciation. Purposes. 387aah basis taxpayer, ati “nthe yrend estan nancial position, the deferred tax linbility incre A the prior year. Which of the foligattd Shanges would cause this increase in deferreq at liability? 5, An entity, financial ‘An increase in prepaid insurance . An increase in rent receival ¢ An increase in warranty obligation 4. An entity reported deferred tax asset and deferred ty ibility atthe end of the prior year and at the end of ts current year. For the current year, the entity short eportdefered tax expense or beneGit equal to the ‘a, Decrease in the deferred tax asset b. Increase in the deferred tax liability ¢. Amount of the current Liability plus the sum ofthe ret changes in defarred tax asset and deferred ter liability a. Sum ofthe net changes in deferred tax ane an ferred tax liability 7, Because an entity uses different methods to depreciate ‘equipment for accounting and income tax purposes, the entity has temporary differences that will reverse during the next year and add to taxable income. Deferred income taxes that are based on these temporary differences shall be classified as 2. Contra account to eurrent assets . Contra account to noncurrent assets 4. ts ‘the current Year-end, an entity had a deferred tax ity arising from accelerated depreciation that a deferred tax asset relating to rent received ‘advance which is expected to reverse in the next year. ich of the following shall be reported in the current vend statement of financial position? ‘The excess of the deferred tax liability over the deferred tax asset as a noncurrent lsbility. ‘The excess of the deferred tax liability over the tax asset as a c ‘The deferred tax liability as a current liability jch statement is true regarding deferred tax asset ability in the financial statements? _ Deferred tax asset is always netted against deferred tax liability. Deferred tax asset of one jurisdiction is offset against deferred tax liability of another jurisdiction in the netting proces ‘d. Deferred tax asset and liability are classified as current and noncurrent based on expiration date. deferred tax liability is computed using a Current tax law regardless of expected or enacted future tax law “b. Expected future tax law regardless of whet! ‘enacted or not Either current or expected future tax law regardless of whether the expected future tax law is enacted or notProblem 16-35 Multiple choice (IAA) 1. The purpose of interperiod tax allocation is to . The a A Hic ntities to utilize carryforwar a tee entities whose tax liabilities vary sign; wy b. fom year to year to smooth tax payments, " mmporary differences that exist at year-eng 4, Amortize the deferred. tax liability. 2, Intraperiod tax allocation a. Involves the allocation of income taxes betweey current and future periods. eee income statement. c. Is not generally acceptable. : d. Arises because different income statement items ar | taxed at different rates. 8. Which is true about intraperiod tax allocation? a. . Intraperiod tax allocation arises because certain itens are recognized for accounting and tax purposes. b. Intraperiod tax allocation is required for the effect of accounting policy. c. The purpose is to allocate income tax expense evenly over a number of accounting periods. a. The ii i W ie amount of tax. 4. All would require intraperiod tax allocation, except a. Discontinued operation b. Prior period | Income from continuing operations 5. Tax expense should be allocated to all, except a. Discontinued oj erati Prior period meee d. Other comprehensive income 560wr joblem 17-14 Multiple choice (LAA) 1, Which statement characterizes defined contribution plan? Defined contribution defined benefit plans, . loyer's obligation is satis appro F c, The investment risk is borne by the employer. d. Contributions are made in equal amounts by employer and employees. plans are more complex than 2 Which is not a characteristic of defined contribution plan? a. The employer contribution each period is based on a formula. b TI by an employee's Richest galery. ¢, The accounting for a defined contribution plan is straightforward and uncomplicated. d. The benefit of gain or the risk of loss from the assets contributed to the plan is borne by the employee. 3.A formula in a defined contribution plan a. Defines the benefits that the employee will receive at the time of retirement. b. Ensures that the defined beriefit cost and funding are the same. ‘ eriod based on ul 4 Barus that enough fund would be available. 4 Which statement is true concerning the recognition and measurement of a defined contribution plan? a. The contribution sill be recognized as expense in od it is payable. v ae perio oneeibution at the end of the period shall be recognized as accrued liability, - ©. Any excess contribution shall be recognized as prepaid expense but only to the extent that the prepayment will 4, etd toa reduction jn future payments or a cash refund. ntribution plan. 597 ar ERTS5. Which statement characterizes defined benefit plany Normula in a defined benefit plon quires that the benefit of gin orth risk of lose m the assets contributed to the plan should be by the employee. eats * formula, ¢. Retirement benefits depend on how well pension fung ‘assets have beon managed. 4. The investment risk is borne by the employee, 6, Which statement is incorrect concerning the ‘and measurement of a defined benefit plan? ‘a. Actuarial assumptions are required to measure the obligation and expense and there is a possibility of ‘actuarial gains and losses, 'b. The obligation is measured on a discount a d benefit plan is not necessarily the amount of contribution due for the period, attributes of both defined contribution and defined it plan, the plan is deemed 1 Defined contribution plan ‘ther defined benefit nor defined contribution plan 7.4m a benefit plan, the process of funding refers to a Determining the defined benefit obligation. . Determining the accumulated benefit obligation. 4. Determining the amount reported expense. for pension 8. In accounting for a defined benefit plon . F crcreesi ect opine b. The employer responsibility contribution each year. ©. The expense recognized each period is equal to the cash contribution to the plan. 4. The liability is determined based upon variables thst reflect current salaxy levels.Problem 17-15 Multiple choice (IFRS) What is net interest in relation to defined benefit cost? 4. Interest expense on defined benefit Interest income onthe far vas of peace 1 The components of defined benefit cost incude g the following, except de al 1a. Service cost b. Net interest 4 interest income on plan assets Interest expense on defined benefit liability less tax of the following should be included in plan assets? Assets held by a long-term employe benefit fund Qualifying insurance policy 2. The service cost ofa defined benefit plan com of the following, except ae a. Current service cost 'b. Past service cost © Gain or loss on plan settlement a nee pol Neither assets held by "fund nor qualifying insurance policy return on plan assets Is equal to the fair value of the plan as ployee benefit ‘8, Which of the following components of defined benefit cot shall be recognized through other comprehensive income? ‘2. Current service cost 2 pl during the year. is Sat metios foal ; Is equal to the discount rate times the fair value of the plan assets at the beginning of the period. Is equal to the expected rate of return, 4 Remeasurements of defined benefit plan include {Plan assets must satisfy all of the following conditions, iicept ‘The assets are held by an entity, the fund itself, that, is legally separate from the reporting entity ‘The assets are available to pay only employee benefits ‘The assets are not available to the creditors. 4. The difference between actual return and interest income on plan assets, ». Actuarial gain ot loss on projected benefit obligation ©& Change in the effect of asset ceiling minus interest expense on the beginning effect of asset ceiling BB a insurance poy ined by an insurer that isnot Birsisiog party of he reporting sotty andthe procseda the pote can be sed only fo pay employee bone. Treated as a prior period adjustment. 3. Amortnd over the femining service period & Recorded in other comprehercine income, Aggregaue policy a Any “& Unconditional insurance policy 600 601ag joblem 18-27 Multiple choice (AA) sa pension Liability is reported when ‘The projected benefit obligation exceeds the fair value ® of plan asset The accumulated benefit obligation i p, The accumulated benefit obligation is leee than the ¢, The pension expense is greater than the funding. @. Cumulative other comprehensive income exceeds the fair value of plan assets. 9A pension asset is reported when a. The accumulated benefit obligation exceeds the fair value of plan assets. b. The accumulated benefit obligation exceeds the fair value of plan assets and past service cost. ¢ Plan assets at fair value exceed the accumulated benefit obligation. be z obligation. 3. Which measure requires the use of future salaries in the computation of benefit obligation? a. Vested benefit obligation b. -umulated benefit obligation . d. Current benefit obligation 4. What is the discount rate for pension plans? a TI for high quality corporé b. The expected rate of return on plan assets ¢. The weighted average interest rate d. The bank prime interest rate 5.The interest on the projected benefit obligation a. Reflects the incremental borrowing rate b. be effectfively settled. ¢. Is the same as the actual return on plan assets. May be stated implicitly. 647plem 18-28 6 Interest cost included in the net pension cost-under g 18-26 (AICPA Adapted) Aefined Sone plan represents the a. Shortage between the expected and actual return, ‘ 4G. Increase in PVPA due to the passage of time. Bet op ta rn ee 7. Vested benefits 1, Usually require a minimum number of years of serve, }, Are those that the employee is entitled to receive even if fired. 7 fi Acs Doe can Se EN ea SRAAL Perce Benefits to be paid to the retired employee in the 4 8, What is the relationship between the amount funded and the amount reported for defined benefit cost? a. Defined benefit cost must equal the amount funded. ', Defined benefit cost is less than the amount funded ©. Defined benefit cost is more than the amount Funded, ‘employer calculation of pension expense under a defined fit plan, which conponent will not be included? ‘Actuarial present value of benefits attributed by the pension benefit formula to employee service during ‘current period d benefit obligation 9. The projected benefit obligation ‘or loss on plan settlement may the entity net ascets and lisbilities of the us retirement plans? When the estimated cash inflows and outflows are Similar in pattern When the festa and Lites ae both financial Accs and fetes may qveyebe needs per ». Requires pension expense based on existing salary. ¢ Requites the longest possible period for funding. 4. Ts not sanctioned under IFRS. 10, In computing the current service cost «sme eatin prin «nt acts Si eg eria arte Saletan or on level provides Pension obligation and expense. 4. The actual and estimated return on plan aseots should be recognized settle the obligations of another plan. mnt benefit plan investments shall be carried at istic measure 0 648 osproblem 19-18 Multiple choice (PAS 19) i short-term employee benefits include all, except Wages, salaries and social security contributions. f, Short-term compensated absences. ¢, Profit-sharing bonus payable in more than twelve months after the end of reporting period. 4. Nonmonetary benefits, such as medical care, housing, car and free and subsidized goods. 2 Short-term employee benefits are described by all, except a. No actuarial assumptions are required. b. There is no possibility of any actuarial gain or loss. c. Short-term employee benefits by definition are ayable no later than twelve.months after year-end. a. Short-term employee benefit obligations are on a discounted basis. 3. These are compensated or paid absences 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 ¢. Nonaccumulating and vesting d, Nonaccumulating and nonvesting 4.Which of the following criteria is not required for the recognition of a liability for compensated absences? a. The amount of the obligation must be estimable. b. Payment of the obligation must be probable. ¢, Payment of the obligation requires the use of current assets. 4. The compensation either vests with the employee or can be carried forward to subsequent years. 5, These are employee benefits that are Payable as a result of an employee's decision to accept an offer of benefits in exchange for termination of employment. & Termination benefits b Rerminatia employee benefits © Other long-term employee benefits Sorteaplopniest? employee benefits 675Problem 19-19 Multiple choice (IFRS) plem 19-20 Multiple choice (AA) 1 Bmployees are each entitled to 20 days of paid Employees ar Gnased holiday leave cannot be cae Sty forward and does not vest. What is the holiday leged —-— Postemplayment a ¢. Other long-term employee benefit 4. Termination benefit are compensated absences? Unpaid time off ‘A form of healthcare Payroll deductions bility for paid absences should ‘Be accrued during the period when the compensated “time is expected to be used by employees. 2. Employees are entitled to 10 days holiday leave per yee. Unused holiday leave may be carried forward antl the employee leaves the employment of the entity, at which time the entity will pay the employee forall unused holiday leave. What is the holiday leave? ‘Not be accrued unless a contractual obligation exists. ‘the payment of employees’ compensation for future is probable, the amount can be reasonably fated and the obligation relates to rights that mulate, the compensation should be “Accrued if attributable to sevies not yet rendered. . Short-term employee benefit b, Postemployment benefit gtr long-term employee benefit 3, An entity made @ public announcement of @ commitment to a voluntary redundancy plan, The entity bas an obligation to pay employees that choot redundancy a lump sum equal to twice their gross annusl salary. What is the obligation to pay employees that ‘choose voluntary redundancy? ‘a. Short-term employee benefit, b. Postemployment benefit Other long-term employee benefit rendered or not. Recognized when paid. ‘employer offered special termination benefits. The ployees accepted the offer which provided for diate lump sum payments and future payments at fend of the next two years. The amount of expense recognized in the current year should include "The total of the lump sum and future payments ‘One third of the lump sum payments and one third of the present value of the future payments On ments 4.A profit-sharing plan requires an entity to pay a specified the cumulative profit for a five-year period to employees who serve throughout the five-yetT period. What is the profit-sharing plan? uture payments That is the requirement for the accrual of a sick pay? snefits can be reliably estimated. Se ee benefits do not vest “A. Sick pay benefits accumulate 677 ‘4. Short-term employee benefit d. Termination benefit 676