Bonus And Deposits

Question 1

A _______ is a financial compensation that is above and beyond the normal payment expectation of its recipient.

Answer 1

Bonus

Question 2

When does an entity gives its employees that gratuity pay?

Answer 2

When there is a reward earned for achieving goals such as exceeding budgeted income, meeting quotas and superior performance in a project

Question 3

Why do entities give bonuses to employees?

Answer 3

To encourage performance from officers and employees

Question 4

Which of the statements is true?
A. The bonuses gives rise to a liability that needs to be disclosed in the notes to financial statements only
B. Bonuses results to liability that should be measured and reported in the financial statements

Answer 4

B.

Question 5

•To record the accrual expense, debit bonus expense, credit bonus payable
•To record the bonus expense, debit accrual expense, bonus payable
•To record payment, debit bonus payable, credit cash

A. Only statement 1 is true
B. Only statement 2 is true
C. Statement 1 and 3 is correct
D. Statement 2 and 3 is correct
E. All are incorrect

Answer 5

C

Question 6

Represents cash received and held on behalf of other
entities and customers. These items are recognized as
liabilities and classified as to either current or non-
current depending on their settlement dates.

Answer 6

Escrow deposit