For Proper Matching of Revenues and Expenses, the Estimated Cost

question 120

True/False

For proper matching of revenues and expenses, the estimated cost of fringe benefits must be recognized as an expense of the period during which the employee earns the benefits.

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Definitions:

Indexation

A method of estimating future employment needs by matching employment growth with a selected index, such as the ratio of production employees to sales.

Underutilization

A condition that exists when a department or employer has a lesser proportion of members of a protected class than are found in the employer’s labour market.

Extrapolation

Extending past rates of change into the future.

Relevant Legislation

Laws and legal provisions that are pertinent to a particular situation, activity, or context, affecting how entities should operate or comply.