Which of the Following Gives Rise to the Requirement to Accrue

question 143

Multiple Choice

Which of the following gives rise to the requirement to accrue a liability for the cost of compensated absences?

• A) Payment is probable.
• B) Employee rights vest or accumulate.
• C) Amount can be reasonably estimated.
• D) All of these answers are correct.

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Definitions:

Equity Method

An accounting technique used to record an investor’s proportional share of an associate company’s earnings or losses on its financial statements.

Unrecognised Losses

Losses that have occurred but have not been officially recorded in the financial statements.

Controlling Interest

Controlling interest is a situation in which an investor, entity, or group of entities owns enough shares to dictate the company's policies and direction through voting power.

Ownership Structure

The way in which a company is owned and organized, detailing the distribution of shareholder and stakeholder interests.