Answer the following statements true (T) or false (F)

1. Vacation, health, and pension benefits must be estimated and recorded as a liability.
2. When an employee takes a paid vacation, the Vacation Benefits Payable account will be decreased
with a credit.
3. A pension plan is a plan that provides benefits to retired employees.
4. Warranties pose an accounting challenge because a company does not know which or how many
products will have to be repaired.
5. The entry to accrue the warranty payable includes a credit to Warranty Expense.


1. True
2. False - When an employee takes paid vacation, the Vacation Benefits Payable account will be
decreased with a debit.
3. True
4. True
5. False

Business

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