Statement1:An entity recognizes no liability or expense for non-accumulating compensated absences until the time of the absence, because employee service does not increase the amount of the benefit. Statement 2: An entity shall measure the expected cost of accumulating compensated absences as the additional amount that the entity expects to pay as a result of the used entitlement that has accumulated at the end of the reporting period. Statement 3: An obligation arises as the employees render service that increases their entitlement to future compensated absences. The obligation exists, and is recognized, even if the accumulating compensated absences are vesting.   Only two of the statements are correct All statements are incorrect All statements are correct Only one of the statements is correct

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Statement1:An entity recognizes no liability or expense for non-accumulating compensated absences until the time of the absence, because employee service does not increase the amount of the benefit.

Statement 2: An entity shall measure the expected cost of accumulating compensated absences as the additional amount that the entity expects to pay as a result of the used entitlement that has accumulated at the end of the reporting period.

Statement 3: An obligation arises as the employees render service that increases their entitlement to future compensated absences. The obligation exists, and is recognized, even if the accumulating compensated absences are vesting.
 
Only two of the statements are correct
All statements are incorrect
All statements are correct
Only one of the statements is correct
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