A government has a liability for accrued compensated absences at the beginning of 20X5 of $500,000. This liability did not mature in 20X4. At the end of 20X5, the government has a liability for accrued compensated absences (not due and payable) of $600,000. In addition, the government had $10,000 of matured compensated absences to be paid in early 20X6 from existing fund assets. The government paid compensated absences of $400,000 during 20X5. The General Fund expenditures for compensated absences for 20X5 should be reported at what amount?

Question

Quizplus · Accepted Answer

The General Fund expenditures for compensated absences should include the amount paid during the year ($400,000) plus the increase in the liability for accrued compensated absences (not due and payable) ($100,000, calculated as $600,000 - $500,000). Therefore, the total expenditures for compensated absences in 20X5 should be $410,000. The $10,000 matured compensated absences to be paid in early 20X6 are not included in 20X5 expenditures as they are not due and payable during 20X5.

A Government Has a Liability for Accrued Compensated Absences at the Beginning