When an organization recognizes a provision and related expense for annual leave, and a provision for long-service leave for its employees, the risk to employees that they will not be paid these amounts that have been provided is effectively zero. Is this true or false? Why? 

2. Some employers will pay out employees for any unused sick-leave entitlements if they leave the organization, whereas in other organizations employees forfeit this entitlement when they leave.

 REQUIRED: 

Explain how these different types of sick-leave entitlements are treated for accounting purposes. 

4. Shelley Ltd pays its salaries fortnightly in arrears. The next pay day is Thursday 2 July. The fortnightly salary expense is $30 000, of which $10 000 is retained to pay the Australian Taxation Office (ATO) on behalf of the employees. Payments to the ATO are made every second Monday, with the next payment being made on Monday 6 July. Shelley Ltd.’s reporting period ends on 30 June. 

REQUIRED Provide the journal entries in the books of Shelley Ltd for: 

(a) 30 June 

(b) 2 July 

(c) 6 July.

Answer rating: 100% (QA)

1 It is true The organization should recognize the provision and related expense for annual leave and the provision for longservice leave for its employees The employees do not have to worry about the ... View the full answer