Which of the following statements is correct?
A)Social Security tax is paid only by the employer.
B)The pay period always ends in conjunction with the company's fiscal year-end.
C)Employee benefits such as vacation time and sick days should be recognized when the employees earn the benefit and not when they take the days off from work.
D)Unemployment taxes are paid by both the employer and the employee.

Question

Quizplus · Accepted Answer

Employee benefits should be recognized in the period they are earned, which is when the employee performs the work that qualifies for the benefit, not when they take the days off from work. This is in accordance with the accrual basis of accounting. Choices A, B, and D are incorrect because Social Security tax is paid by both the employer and employee, the pay period can differ from the fiscal year-end, and unemployment taxes are generally paid only by the employer.

Which of the Following Statements Is Correct