To properly recognize the expense associated with compensated absences, a company should

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Compensated absences are typically earned by employees as they work, so the expense should be recognized in the same period in which the employee earned the time off. This is typically done by estimating the cost of the time off and accruing that expense over the period it is earned. Option A is not correct, as it would result in expenses being recognized in periods when the work is not being performed. Option B is also incorrect, as it would not account for the actual costs of absences. Option D would not properly account for the costs associated with compensated absences.

To Properly Recognize the Expense Associated with Compensated Absences, a Company