Accrued Vacation and Accrued Vacation Pay

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Accrued Vacation

Accrued vacation refers to the vacation time that has been earned by an employee but yet to utilize.

Accrued Vacation Pay

It refers to the amount of vacation time that has been earned by an employee but has not yet made use of it.  The following steps should be followed in order to calculate accrued vacation for the first time:

  • Determine the number of hours that has been earned by an employee during the current accounting period;
  • Deduct the number of hours that has been utilized from the number of hours earned during the current accounting period;
  • Multiply the remaining number of hours with the employee’s hourly wage rate to calculate the correct amount to be accrued in the company’s books.

 

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