Performance bonuses are considered a part of salaries and wages and are treated in the same manner. They are not capitalized as part of the cost of an asset or charged directly against opening retained earnings. They also do not form part of the leave entitlements of employees.

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Performance Bonuses

Question 54

Multiple Choice

Performance bonuses:

A) are capitalised as part of the cost of an asset 'bonus payments'.
B) form part of salaries and wages and are treated in the same manner.
C) are charged directly against 'opening retained earnings'.
D) form part of the leave entitlements of employees.

Correct Answer: