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1. Which of the following statements is true regarding a defined…

1. Which of the following...
1. Which of the following statements is true regarding a defined contribution pension plan?

a) The pension benefits to be received by the employee during retirement are defined in the plan.
b) Defined contribution plans are the most popular type of pension plan for large corporations.
c) Defined contribution plans do not define the required benefits that must be paid to retired employees.
d) Employers that use defined contribution plans are assuming more risks than employers that use defined benefit plans.

2. According to current GAAP, termination benefits paid to an employee should be:
a) charged to an intangible asset and amortized straight-line over the next 15 years
b) charged to a loss
c) charged to retained earnings
d) charged to an intangible asset and amortized over the projected years of service of the remaining work force

3. The accumulated benefit obligation is equal to the

a) actuarial present value of all benefits earned as of a specified date, both vested and nonvested, by employees using current salary levels in the pension plan formula
b) actuarial present value of all benefits earned as of a specified date, both vested and nonvested, by employees using anticipated future salary levels in the pension plan formula
c) difference between the annual pension expense and the amount actually funded during the year
d) actuarial present value of benefits attributed by the pension plan formula to services rendered by employees during the current year

4. Amortization of any unrecognized net gain or loss is included in pension expense of a given year if at the:
a) end of the year, the cumulative unrecognized net gain or loss exceeds 10% of the greater of the actual projected benefit obligation or the fair value of the plan assets
b) beginning of the year, the cumulative unrecognized net gain or loss exceeds 10% of the greater of the actual accumulated benefit obligation or the fair value of the plan assets
c) end of the year, the cumulative gain or loss exceeds 10% of the greater of the actual accumulated benefit obligation or the fair value of the plan assets
d) beginning of the year, the unrecognized cumulative gain or loss exceeds 10% of the greater of the actual projected benefit obligation or the fair value of the plan assets

5. O’Brien began a defined benefit pension plan on January 1, 2010. During 2010, the service cost was $450,000. O’Brien contributed $450,000 to the pension plan for 2010. The actuary said the projected benefit obligation at December 31, 2010 was $450,000. As of December 31, 2010, what statements can O’Brien make about the pension plan?
I. The pension plan is fully funded.
II. O’Brien does not need to report a liability regarding the pension plan at December 31, 2010.
a) I
b) II
c) both I and II
d) neither I nor II

6. The McMurry Company offers employees a defined contribution pension plan. In 2010, McMurry contributed $75,000 to the plan, which paid $95,000 to retired employees. Which of the following statements is true?
a) McMurry will record an accrued liability of $20,000.
b) McMurry will report pension expense of $75,000.
c) McMurry will recognize prior service cost of $20,000.
d) McMurry will recognize actuarial gains and losses on the plan over current and future periods.

7. Disclosures for a defined benefit pension plan should include which of the following?

I. number of beneficiaries
II. reconciliation of the ending value of the projected benefit obligation
III. reconciliation of the ending fair value of the plan assets
IV. the composition of plan assets
V. the discount rate used
VI. expected long-term rate of return on plan assets
a) I, II, III, IV
b) I, III, V, VI
c) II, III, V, VI
d) III, IV, V, VI

8. Current GAAP requires that the financial statements issued by a funding agency for a company's pension plan include all of the following except

a) information about the net assets (at fair value) available for benefits at the end of the plan year
b) a financial statement (on a cash basis) presenting information about the pension payments to retirees
c) a financial statement containing information about the changes during the year in the net assets available for benefits
d) information about the actuarial present value of accumulated plan benefits

9. The expense for other postretirement benefits, such as health care benefits, dental benefits, and eye care benefits, currently is accounted for

a) on an accrual basis
b) on a cash basis
c) on either a cash basis or an accrual basis; both methods are acceptable
d) by footnote disclosure only

10. If an employer were to account for a defined benefit pension plan on the cash basis, it would be a violation of the: a) going-concern assumption
b) accrual concept c) separate entity concept d)double-entry accounting
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Answered in 7 minutes by:
3/16/2011
Manal Elkhoshkhany
Category: Finance
Satisfied Customers: 9,925
Experience: More than 5000 online tutoring sessions.
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Hello camaleon

 

Is this a timed assignment?

Ask Your Own Finance Question
Customer reply replied 6 years ago

Yes!

ok, please check the last question it seems missing one of the choices
Ask Your Own Finance Question
Customer reply replied 6 years ago

10. If an employer were to account for a defined benefit pension plan on the cash basis, it would be a violation of the

a) going-concern assumption
b) accrual concept
c) separate entity concept
d) double-entry accounting

Here you go :)

 

Please click on the following link:

 

http://www.box.net/shared/xnpyktsgfp

 

Regards,

Manal Elkhoshkhany
Category: Finance
Satisfied Customers: 9,925
Experience: More than 5000 online tutoring sessions.
Verified
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