The most important consideration in evaluating the fairness of the amounts accrued for holiday pay, sick pay and other benefits is:
A) the profitability of the client which will enable these liabilities to be met.
B) the amount expended to date in the current period.
C) the consistent accrual of these liabilities in accordance with relevant agreements or legislation.
D) the actual expense incurred for the prior period.

Question

Quizplus · Accepted Answer

The most important consideration in evaluating the fairness of the amounts accrued for holiday pay, sick pay and other benefits is whether the accrual is consistent with relevant agreements or legislation. This ensures that employees are receiving the benefits they are entitled to and that the company is fulfilling its legal and contractual obligations. The profitability of the client or the amounts expended to date are not relevant factors when determining fair accruals. Actual expenses incurred in the prior period may be used as a reference point, but it should not be the sole consideration.

The Most Important Consideration in Evaluating the Fairness of the Amounts