Question

Which of the following statements is false?

A. When rights are vested, an employer has an obligation to make payment to an employee.
B. Unemployment taxes are paid by the employer.
C. Profit-Sharing Bonus Payable is usually reported as a long-term liability.
D. The liability for compensated absences should be recognized in the year earned.

Answer 1

The false statement is C. Profit-Sharing Bonus Payable is usually reported as a long-term liability, because generally these bonuses are expected to be paid out within a year and are not considered long-term.

Step-by-step explanation:

The statement that is false among the ones provided is: C. Profit-Sharing Bonus Payable is usually reported as a long-term liability. Typically, profit-sharing bonuses are not considered long-term liabilities because they are expected to be paid within a relatively short period, such as within a year after the profits are calculated and the bonuses are declared. Meanwhile, other components provided in the question such as unemployment taxes paid by the employer, and recognition of the liability for compensated absences in the year earned, are accurate representations of employer responsibilities and accounting practices.