The employees of the City of Raymond earn vacation compensation that totals $1,500 per week. During 2011, $30,000 in vacation time was taken and $48,000 is expected to be used during the latter part of next year. On fund-based financial statements, what liability should be reported at the end of 2011?

Question

Quizplus · Accepted Answer

In fund-based financial statements, liabilities are recognized when they are due and payable. Since vacation compensation is only recognized when taken, and $30,000 was already taken in 2011, no additional liability is reported at the end of 2011.

The Employees of the City of Raymond Earn Vacation Compensation