acct 253 ch 20

  1. 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
  2. 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
  3. In a defined-benefit plan, a formula is used that

    A. defines the benefits that the employee will receive at the time of retirement
  4. 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
  5. 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
  6. 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
  7. Vested benefits

    A. are defined by all of these
  8. 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
  9. 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
  10. 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
  11. The actual retrun on plan assets

    B. includes interest, dividends, and changes in the market value of the fund assets
  12. 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
  13. When a company adopts a pension plan, prior sevice costs should be charged to

    D. operations of current and future periods
  14. 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
  15. 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
  16. 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
  17. 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
  18. 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
  19. 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
  20. Which of the following statements is true about postretirement health care benefits

    B. the beneficiary is the retiree, spouse, and other dependents
  21. Postretirement benefits may include all of the following except

    B. severance pay to laid-off employees
  22. Which of the following statements is correct?

    C. all of these
  23. Which of the following is a significant item not recognized in the accounts and in the financial statements?

    C. all of these
  24. The employer's pension expnese is the amount that it is obligated to pay to the pension trust in

    B. a defined contribution plan
  25. In a defined benefit plan, the funding level depends on all of the following factors except

    B. age of the employer company
  26. A measure of an employer's pension obligation using future salary levels is the

    C. projected benefit obligation
  27. Which one of the following is not a component of pension expense

    A. amortization of projected benefit obligation
  28. All of the following increase pension expenses except

    C. actual return on plan assets
  29. Which one of the following pension items is recognized in the employer's accounts and financial statements?

    D. none of these
  30. The FASB prefers that unrecognized prior service cost be amortized using the

    A. years of service method
  31. 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
  32. Which of the following losses should be recognized immediately?

    C. losses that arise from a single occurrence such as a plant closing
  33. All of the following information should be disclosed in the notes to the financial statements except

    D. all of the options are disclosed
Card Set
acct 253 ch 20
acct 253 ch 20