Vacation pay is charged properly as an expense in the month in which the employee earns the vacation pay.

Question

Quizplus · Accepted Answer

Vacation pay is considered an earned wage and should be charged as an expense in the month in which the employee earns it, even if the actual vacation time is taken at a later date. This ensures that the expense is recorded in the correct period and reflects the actual cost of the employee's wages.

Vacation Pay Is Charged Properly as an Expense in the Month