chapter 20

chapter 20 - Correct MultipleChoice,Question22

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Correct Multiple Choice, Question 22 In a defined-benefit plan, the process of funding refers to making the periodic contributions to a funding agency to ensure that funds are available to meet retirees' claims. determining the amount that might be reported for pension expense. determining the projected benefit obligation. determining the accumulated benefit obligation. Multiple Choice, Question 23
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Correct.     In all pension plans, the accounting problems include all the following  except allocating the cost of the plan to the proper periods. determining the level of individual premiums. measuring the amount of pension obligation. disclosing the status and effects of the plan in the financial statements. Correct Multiple Choice, Question 30 The projected benefit obligation is the measure of pension obligation that requires pension expense to be determined solely on the basis of the plan formula applied to years of service to date and  based on existing salary levels. requires the longest possible period for funding to maximize the tax deduction.
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is required to be used for reporting the service cost component of pension expense. is not sanctioned under generally accepted accounting principles for reporting the service cost component of pension  expense. Multiple Choice, Question 32 Correct.     Vested benefits usually require a certain minimum number of years of service. are those that the employee is entitled to receive even if fired. are not contingent upon additional service under the plan. are defined by all of these. Multiple Choice, Question 36 Correct.     The interest on the projected benefit obligation component of pension expense may be stated implicitly or explicitly when reported.
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reflects the incremental borrowing rate of the employer. is the same as the expected return on plan assets. reflects the rates at which pension benefits could be effectively settled. Correct Multiple Choice, Question 38 The actual return on plan assets is equal to the change in the fair value of the plan assets during the year. includes interest, dividends, and changes in the market value of the fund assets. is equal to the expected rate of return times the fair value of the plan assets at the beginning of the period. all of these. Correct Multiple Choice, Question 40 Which of the following items should be included in pension expense calculated by an employer who sponsors a defined- benefit pension plan for its employees?    Fair Value of plan assets Amortization of prior service cost
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Yes No No Yes No No Yes Yes Multiple Choice, Question 42 Correct.  
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chapter 20 - Correct MultipleChoice,Question22

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