Accrued Vacation Pay

A business provides its employees with varying amounts of vacation per year, depending on the length of employment. The estimated amount of the current years vacation pay is $138,000.

Part 1. Journalize the adjusting entry required on January 31, the end of the first month of the current year, to record the accrued vacation pay. If an amount box does not require an entry, leave it blank.

	BLANK ___________	fill in the blank 0fa548fe7031fae_2	fill in the blank 0fa548fe7031fae_3
	BLANK___________	fill in the blank 0fa548fe7031fae_5	fill in the blank 0fa548fe7031fae_6

The options for the column on the left are:

- Accounts Payable

- Cash

- Salaries Payable

- Vacation Pay Expense

- Vacation Pay Payable

Part 2. How is the vacation pay reported on the company's balance sheet?

A) As a current asset

B) As a current liability

C) As an expense

D) As a long-term liability

Part 3) When is this amount removed from the company's balance sheet?

A) When employees are paid

B) When employees take vacations

C) When the accounting period ends

D) Never