On November 1, Prince Vacuum Company offered special early retirement benefits t

Question

On November 1, Prince Vacuum Company offered special early retirement benefits to those employees who were eligible. This program was in effect until year-end. Prince should recognize a liability and an expense related to these special termination benefits when

A. The amount of the benefit can be reasonably estimated.
B. The amount of the benefit can be reasonably estimated and it is probable that the employees will accept the offer.
C. The amount of the benefit can be reasonably estimated and the employees accept the offer.
D. The benefits are paid to the employees.

Explanation / Answer

B. The amount of the benefit can be reasonably estimated and it is probable that the employees will accept the offer.

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