Use the Following Information to Questions

question 58

Multiple Choice

Use the following information to Questions
Lincoln City has a 6/30 fiscal year-end.The City has a policy of recognizing revenues/ expenditures when collected/paid or if expected to be collected/paid within 60 days of year-end.
The City has a sick leave benefit policy for its employees.The policy allows City employees one day of paid sick leave per month and permits them to accumulate sick leave they do not take.Sick leave vests at the completion of the fifth year of employment, and unused sick leave is paid in cash upon termination or retirement.During the fiscal year ended 6/30/11, City employees who are paid from the General Fund, earned $2.8 million of sick leave, of which $1.0 was taken.Of the balance, the City estimates $.2 million will be taken in the next sixty days, $.6 million will be taken in the next five years, $.4 million will vest, and $.6 million will never be taken.
-The amount of sick pay liability that should appear on the General Fund balance sheet at 6/30/11 is

• A)$.1.2 million.
• B)$.4 million.
• C)$.2 million.
• D)No liability should appear.

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Definitions:

Environmental Effects

The impact of surroundings, including social, cultural, and physical environments, on the development and behavior of individuals or systems.

Superficial

Describing an approach or level of understanding that is only concerned with surface aspects or appearances, lacking depth and thoroughness.

Economic Recessions

Periods of significant decline in economic activity across the economy, lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Self-identity

An individual's awareness of their own personal characteristics and the way these characteristics distinguish themselves from others.