Accounting 10-4 Employees' fringe benefits

1. The employee contribution is deducted before taxes 2. The contributions and related earnings are not taxed until withdrawn at retirement These are benefits of a ____ _____

401k plan

If the unfounded pension liability is to be paid within one year, it is reported as a _____ ______ on the balance sheet

Current Liability

Employees may be required to take all their vacation time within one year, in such cases, any accrued vacation pay will be paid within on year. Thus, the vacation pay payable is recorded as a ______ ______ on the balance sheet.

Current liability

To match revenues and expenses, the __________ ______ __ ______ _______ is recorded as an expense during the period in which the employee earns the benefits. (ECOFB)

Estimated cost of fringe benefits

Many companies provide their employees benefits in addition to salary and wages earned, which may include vacation, medical, and retirement benefits. These are known as -

Fringe benefits

Any portion of the unfunded pension liability that will be paid beyond one year is a _____-____ ______

Long-term liability

When recording a defined contribution plan, the employer's cost is debited to _______ and the credit goes to ____

Pension Expense, Cash

The pension cost of a defined benefit plan is debited to _____ ____. _____ is credited for the amount contributed (funded) by the employer. Any unfunded amount is credited to _____ ____ ______

Pension Expense, Cash, Unfunded Pension Liability

Accoutning for other post retirement benefits is recorded by debiting __-____ _____ _____ and, if fully funded, ____ is credited for the same amount.

Post-retirement benefits expense, cash

Vacation pay is journalized by debiting _____ and crediting ______

Vacation pay expense, vacation pay payable

When employees take vacations, the vacation pay is decreased by debiting ____ __ ______. Salaries or Wages Payable and other related payroll accounts for taxes and withholdings are credited.

Vacation pay payable

Employee vacations are sometimes called

compensated absences

In a ____ _______ plan the employer is obligated to pay for the employees future pension benefits

defined benefit

company pays the employee a fixed annual pension based on a formula. The formula is usually based on factors such as the employee's years of service, age, and past salary.

defined benefit plan

Many companies are replacing their _____ ____ plans with ____ _____ plans

defined benefit, defined contribution

the company invests contributions on behalf of the employee during the employee's working years. Normally, the employee and employer contribute to the plan. These plans depend on the total added and the investment returns earned on additions.

defined contribution

Two basic typed of pension plans are _______ and ______

defined contribution, defined benefit

The cost of employee benefits is recorded as an ______ by the employer

expense

Vacation pay becomes the employer's ______ as the employee earns vacation rights

liability

If employees are allowed to accumulate their vacation pay, the estimated vacation pay payable that will NOT be taken within a year is reported as a ___-____ ________

long-term liability

A cash payment to retired employees, rights are accrued by employees as they work, based on the employer's plan.

pension