When determining the liability for compensated absences, the amount should be based on 1. an average of the last three year's rates of pay when employees earn the right to the compensated absences. 2. the current or future rates (if known) of pay expected to be paid when employees use compensated time. 3. the PV (present value) of the amount expected to be paid in future periods.
When determining the liability for compensated absences, the amount should be based on 1. an average of the last three year's rates of pay when employees earn the right to the compensated absences. 2. the current or future rates (if known) of pay expected to be paid when employees use compensated time. 3. the PV (present value) of the amount expected to be paid in future periods.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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When determining the liability for compensated absences, the amount should be based on
1. an average of the last three year's rates of pay when employees earn the right to the compensated absences.
2. the current or future rates (if known) of pay expected to be paid when employees use compensated time.
3. the PV (present value) of the amount expected to be paid in future periods.
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