Employee vacation and paid-time-off benefits accrual include a debit to an expense account and a credit to a(n)

Question

Quizplus · Accepted Answer

The correct answer is A) liability account because when employees accrue vacation or paid-time-off benefits, the company is essentially incurring a liability, as it owes the employees for the time off that they have earned but not yet taken. This is recorded as a debit to an expense account (to reflect the cost of the benefit earned by the employee) and a credit to a liability account (to reflect the company's obligation to pay the employee in the future).

Employee Vacation and Paid-Time-Off Benefits Accrual Include a Debit to an Expense