ABC Company Inc., which operates on accrual basis accounting, hired an employee who started work on May 15, 2022. Per the companys policies, the employee became eligible to start earning paid time off (PTO) after 6 months at a rate of 10 hours per month and PTO is paid out upon termination.

Which financial statements are affected in the year 2022?

*

Balance Sheet only

Income Statement only

Balance Sheet & Income Statement

Neither the Balance Sheet nor the Income Statement