During Its First Year of Operations, a Company Granted Its

question 152

Multiple Choice

During its first year of operations, a company granted its employees vacation privileges and pension rights estimated at a cost of $21,500 and $15,000, respectively. The vacations are expected to be taken in the next year, and the pension rights are expected to be paid in the future 5-30 years. What is the total cost of vacation pay and pension rights to be recognized in the first year?

• A) $15,000
• B) $36,500
• C) $6,500
• D) $21,500

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Definitions:

Internal Control

Encompasses the procedures and policies implemented by an organization to safeguard its assets, ensure accurate and reliable financial reporting, and comply with laws and regulations.

Outstanding Checks

Checks issued by a company that have been recorded in its books but have not yet been cashed by the recipient.

Deposits In Transit

Deposits in transit refer to money that has been received and recorded by a business but not yet by its bank, often because of time needed for the banking processing.

NSF Check

A check that cannot be processed due to insufficient funds in the account it was drawn on, also known as a "bounced check."