Vacation pay payable is reported on the balance sheet as a(n)
a. current liability or long-term liability, depending upon when the vacations will be taken by employees
b. current liability
c. expense
d. long-term liability
it's not b
To determine the correct answer, we need to understand how vacation pay payable is classified on the balance sheet.
Vacation pay payable is the amount of money that an employer owes to its employees for vacation time accumulated but not taken. This liability represents the future financial obligation of the company to its employees.
Considering this, the correct answer would be:
a. current liability or long-term liability, depending upon when the vacations will be taken by employees
The classification of vacation pay payable as a current liability or long-term liability depends on when the vacations will be taken by employees. If the vacations are expected to be taken within the next year, it would be classified as a current liability. If the vacations are anticipated to extend beyond one year, it would be classified as a long-term liability. The classification is important for understanding the company's current and long-term financial obligations.