Question

a) When are expenses of benefits such as vacation pay and retirement pay recorded? Explained.

b)What payroll-related expense does an employer incur becuase of its employees?

Answer 1

a) When are expenses of benefits such as vacation pay and retirement pay recorded?

Ans: Expense must be recorded when liability is created, in the period when employee earned it. when accrued debit vacation benefit expense and credit vacation benefit payable ; debit vacation benefit payable, not wages expense and credit expense when paying.

So, Expenses of Benefits such as Vacation Pay and Retirement Pay are Recorded when Employees Earn them.

b) What payroll-related expense does an employer incur because of its employees?

Ans:

1. Wages or Salaries
2. Payroll Taxes
3. Pension Benefits
4. Vacation Benefits
5. Worker’s Compensation Insurance.