Incorrect. The statement that the liability for compensated absences should be recognized in the year earned is true. Compensated absences are usually reported as a current liability, not a long$-$term liability.

Which of the following statements is false?

The liability for compensated absences should be recognized in the year earned.

When rights are vested, an employer has an obligation to make payment to an employee.

Unemployment taxes are paid by the employer.

Compensated absences are usually reported as a long$-$term liability.