Recording of business Transactions Assignment Paper
Order ID |
53563633773 |
Type |
Essay |
Writer Level |
Masters |
Style |
APA |
Sources/References |
4 |
Perfect Number of Pages to Order |
5-10 Pages |
Description/Paper Instructions
Recording of business Transactions Assignment Paper
Recording of Business Transactions
Should employee vacation pay be recorded in the period during which the vacation privilege is earned or during the period in which the vacation is taken? Use and discuss accounting principles to support your answer.
Submission Instructions:
Your initial post should be 200-300 words, formatted and cited in current APA style.
You should respond to at least two of your peers by extending, refuting/correcting, or adding additional nuance to their posts.
Classmatec 1 post
Vacation time is a fringe benefit that is a type of benefit companies offer to their employees in addition to salary and wages earned. It can also take other forms such as pension plans, health, life or disability insurance coverage. If the employer pays part or all the cost of the fringe benefits, these costs should be considered as expenses.
In order to match revenues and expenses, the estimated cost of these benefits should be recorded as an expense during the period in which the employee earns the benefit, in this case the vacation time. In recording the expense, the related liability is also recorded. According to the matching principle, the expense should be recognized when it is actually incurred, doesn’t matter, payment is made or not, in this case whether the employee took the vacation or not.
This principle ensures that the expenses incurred in the current period are matched against the revenues earned in the same period. This concept is important because it gives a more accurate appraisal of the results of operations, helps to avoid any misrepresentation of the real financial position of the business.
If we go back in time, we also learned in previous chapters how the accrual basis of accounting is designed to record accounting transactions in the period in which they actually occur and thus affect the accounting equation (assets, liabilities and stockholder’s equity), rather than the period in which the cash flows related to them occur. In other words, following these principle and concepts, employee vacation should be recorded in the period during which the privilege is earned.
REFERENCES
Warren, Carl (2018) Survey of Accounting: Chapter 8. Liabilities and stockholders’ equity. Page 322
Warren, Carl (2018) Survey of Accounting: Chapter 3. Basis Accounting systems: Accrual Basis. Page 87-88
Classmare post 2
Vacation time is an important part of the compensation and benefits package for employees. However, employees do not automatically use vacation as it is accrued. Employee vacation pay should be recorded during the time period in which the vacation privilege is earned, not when it is taken. This is in accordance with the accrual basis of accounting. Under this method of accounting, revenues are reported on company income statements when they are earned.
When accrual of vacation time is required, there is no specific process or set of guidelines set by the Financial Accounting Standards Board (FASB), so companies vary in regard to practices (Nguyen, 2019). Vacation time can be recorded monthly or quarterly instead of each pay period.
The time in which the vacation is taken means that the employee has already accrued the time, which had to be approved prior to leaving. Unused vacation time can become a liability, however, according to the FASB. If an employee leaves the company voluntarily or is terminated, the unused pay must be accrued and paid out in accordance with FASB criteria.
Recording employee vacation pay in the period in which it is earned is also consistent with the matching principle of accounting, which requires that companies record expenses that are in accordance with the expenses matched with related revenues. The matching principle reinforces that the expenses should be recorded when they occur and not when it is being used for vacation.
It is the responsibility of the business owner, human resources director, etc. to properly record and account for vacation time, whether it is used or unused. These officials must decide when to record as well and book the vacation accrual as the respective debits and credits. Accrued vacation must be debited in the vacation expense account of a company.
Reference
Nguyen, T. (2019, January 25). Accounting for Vacation Accrual. Retrieved March 30, 2020, from https://smallbusiness.chron.com/accounting-vacation-accrual-63739.html.
Recording of business Transactions Assignment Paper
RUBRIC
QUALITY OF RESPONSE |
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POOR / UNSATISFACTORY |
SATISFACTORY |
GOOD |
EXCELLENT |
Content (worth a maximum of 50% of the total points) |
Zero points: Student failed to submit the final paper. |
20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. |
30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. |
40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. |
50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. |
Use of Sources (worth a maximum of 20% of the total points). |
Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. |
5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. |
10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. |
15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. |
20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. |
Grammar (worth maximum of 20% of total points) |
Zero points: Student failed to submit the final paper. |
5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors |
10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors |
15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. |
20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. |
Structure of the Paper (worth 10% of total points) |
Zero points: Student failed to submit the final paper. |
3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. |
5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper |
7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. |
10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper. |
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