In a defined contribution plan, a formula is used that
B. requires an employer to contribute a certain sum each period based on the formula
Which of the following is not a characteristic of a defined contribution pension plan?
B. the benefits to be received by employees are defined by the terms of the plan
In a defined-benefit plan, a formula is used that
A. defines the benefits that the employee will receive at the time of retirement
In a defined benefit plan, the process of funding refers to
B. making the periodic contributions to a funding agency to ensure that funds are available to meet retirees' claims
In accounting for a defined benefit pension plan
C. an appropriate funding pattern must be established to ensure that enough monies will be available at retirement to meet the beneftis promised
The relationship between the amount funded and the amount reported for pension expense is as follows:
C. pension expense may be greater than, equal to, or less than the amount funded
Vested benefits
A. are defined by all of these
In computing the service cost component of pension expense, the FASB concluded that
A. the projected benefit obligation using future compensation levels
provides a relistic measure of present pension obligation and expense
In determining the present value of the prospective benefits (often referred to as the projected benefit obligation), the following are considered by the actuary:
A. all of these factors
The unexpected gains or losses that result from changes in the projected benefit obligation are called
asset gains & losses/liability gains & losses
A. no/yes
The actual retrun on plan assets
B. includes interest, dividends, and changes in the market value of the fund assets
In accounting for a pension plan, any difference between the pension cost charged to expense and the payments into the fund should be reported as
A. accrued or prepaid pension cost
When a company adopts a pension plan, prior sevice costs should be charged to
D. operations of current and future periods
Prior service cost is amortized on a
C. years of service method or on a striaght-line basis over the average remaining service life of active employees
Unrecognized gains and losses that relate to the computation of pension expense should be
A. recorded currently and in the future by applying the corridor method which provides the amount to be amortized
Market related asset value is used to determine the corridor and to calulate the expected return on plan assets
expected corridor/retrun on plan assets
B. yes/yes
A pension fund gain or loss that is caused by a plant closing should be
B. recognized immediately as a gain or loss on the plant closing
Which of the following disclosures of pension plan information would not normally be required by Statement of Financial Accounting Standards No. 132, "Employers' Disclosure about Pensions and Other Postretirement Benefits"?
D. the amount paid from the pension fund to retirees during the period
The main purpose of the Pnesion Benefit Guaranty Corporation is to
B. administer terminated plans and to impose liens on the employer's assets for certain unfunded pension liabilities
Which of the following statements is true about postretirement health care benefits
B. the beneficiary is the retiree, spouse, and other dependents
Postretirement benefits may include all of the following except
B. severance pay to laid-off employees
Which of the following statements is correct?
C. all of these
Which of the following is a significant item not recognized in the accounts and in the financial statements?
C. all of these
The employer's pension expnese is the amount that it is obligated to pay to the pension trust in
B. a defined contribution plan
In a defined benefit plan, the funding level depends on all of the following factors except
B. age of the employer company
A measure of an employer's pension obligation using future salary levels is the
C. projected benefit obligation
Which one of the following is not a component of pension expense
A. amortization of projected benefit obligation
All of the following increase pension expenses except
C. actual return on plan assets
Which one of the following pension items is recognized in the employer's accounts and financial statements?
D. none of these
The FASB prefers that unrecognized prior service cost be amortized using the
A. years of service method
The unrecognized net gain or loss balance must be amortized when it exceeds 10% of the larger of the
B. beginning projected benefit obligation or the market related asset value
Which of the following losses should be recognized immediately?
C. losses that arise from a single occurrence such as a plant closing
All of the following information should be disclosed in the notes to the financial statements except