Employee Benefits are all forms of consideration given by an entity in exchange for service
rendered by employees or for the termination of employment.
Four categories:
Short-term Long-term Post-employment Termination
employee benefits employee benefits benefits benefits
•wages, salaries •long-term paid •retirement benefits •Employee benefits
and social security absences •other post- provided in
contributions •jubilee employment exchange for the
•paid annual leave •disability benefits benefits (life termination of an
& paid sick leave insurane and employee
•profit-sharing and medical care)
bonuses
•non-monetary
benefits
Short-term Employee Benefits
Expected to be settled wholly before 12 months after the end of the reporting period in which
the employees provided the service.
Short-term benefits are recognised when the employee renders the service. This means that
Debit Credit
Short-term Employee benefit expense xxx
Bank xxx
, Non-monetary items:
Debit Credit
Employee benefit xxx
Bank xxx
Accrual Journal
Step 1: The employee benefit is raised as a liability when incurred:
Debit Credit
Account payable xxx
Bank xxx
Payment of short-term employee benefits
Step 3: if the expense was underpaid, there would be a credit balance on the account
payable, but if the expense has been overpaid, there will be a debit balance on the account
payable.
Debit Credit
Inventory xxx
Employee benefit expense xxx
A portion of the short-term employee benefit expense relating to inventory
manufactured is included in the cost of inventories.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller haaimy04. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $4.55. You're not tied to anything after your purchase.