Question 1

What five alternatives were examined by regulators to determine which best met the recognition-measurement criteria of a liability?

Accepted Answer

1) Contribution based on an ac...

Question 2

What four alternative methods for accounting for prior service cost were considered by accounting regulators?

Accepted Answer

1) Account for it prospectively
2) Recog...

Question 3

Which statement is false?

Accepted Answer

A)   In the computation of pension expense, a negative return on plan assets can be added.
B)   The amount of prior service cost is not included as an asset or a liability.
C)   Interest cost is equal to the projected benefit obligation at the end of the period multiplied by the discount rate used by the company.
D)   A lower-than-expected mortality rate creates a pension loss to a company.E) A) and C)
F) None of the above

Question 4

Which of the following items attributable to a defined benefit pension plan would be recognized on a company's balance sheet?

Accepted Answer

A)   I
B)   II
C)   III
D)   IVE) None of the above
F) B) and D)

Question 5

Two were expected to retire at the end of 2020, two more at the end of 2022, and four at the end of 2024.
Required:
Using the years-of-future-service method, compute the amount of prior service cost to be amortized in the first year.

Accepted Answer

$24,000, d...

Question 6

Martha Co. has a defined benefit pension plan for its employees. The plan was amended at the beginning of 2016 which increased benefits based on services rendered by certain employees in prior periods. The actuary has reported that unrecognized prior service cost resulting from the amendment is $385,000. Five employees expect to receive the increased benefits. Shown below is a schedule of the employees and their expected years of future service: 
 Required:
Using the straight-line method: 
a. Compute the average remaining service life.
b. Determine the amount of unrecognized prior service cost to be included in the 2016 pension expense calculation.

Accepted Answer

a. Average remaining service l...

Question 7

In June of 2011, IASB amended IAS 19, Employee Benefits, changing its method of accounting for pensions in order to make the accounting for pensions similar under U.S. GAAP and IFRS.

Accepted Answer

A) True 
 B)False

Question 8

The accumulated benefit obligation ABO)  is equal to the

Accepted Answer

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.E) None of the above
F) A) and B)

Question 9

GAAP requires that a company accrue the cost of other post-retirement benefits OPRBs) during the periods in which its employees earn the benefits.

Accepted Answer

A) True 
 B)False

Question 10

On January 1, 2015, a company had $84,000 of unrecognized prior service cost. The years-of-future-service method of amortization is used. The company has seven employees, as indicated below:  What amount of prior service cost should be included in pension expense for 2015?

Accepted Answer

A)   $2,000
B)   $9,333
C)   $12,000
D)   $14,000E) A) and B)
F) All of the above

Question 11

Marjorie, Inc.'s records contained the following data as of December 31, 2016, on its OPEB plan:  Required: 
a. Compute the OPEB expense for 2016.
b. Prepare the journal entry to record the 2016 OPEB expense.

Accepted Answer

The answer of Marjorie, Inc.'s records contained the following data...

Question 12

In 2015, the Rachel Company initiated a defined benefit pension plan. It recorded $240,000 as pension expense and paid $280,000 to a funding agency. As a result, Rachel will report

Accepted Answer

A)   pension assets of $280,000 and pension liabilities of $240,000.
B)   an accrued liability of $50,000.
C)   service cost of $280,000 and unfunded prior service cost of $40,000.
D)   prepaid pension cost of $40,000.E) None of the above
F) A) and D)

Question 13

Which of the following statements is true regarding a defined benefit pension plan?

Accepted Answer

A)   Defined benefit plans are relatively easy to handle from an accounting perspective.
B)   Employers that use defined benefit plans are assuming more risks than employers that use defined contribution plans.
C)   Defined benefit plans require an employer to contribute a defined sum each period to a pension fund.
D)   A defined benefit plan requires the employer to fund the plan each year for an amount equal to the pension expense.E) A) and B)
F) A) and D)

Question 14

Under contributory plans the employees bear the majority of the risks of the plan and contribute towards the plan with deductions from their salaries.

Accepted Answer

A) True 
 B)False

Exam 19: Accounting for Post-Retirement Benefits

In June of 2011, IASB amended IAS 19, Employee Benefits, changing its method of accounting for pensions in order to make the accounting for pensions similar under U.S. GAAP and IFRS.

Correct Answer
verified

Marjorie, Inc.'s records contained the following data as of December 31, 2016, on its OPEB plan: Required: a. Compute the OPEB expense for 2016. b. Prepare the journal entry to record the 2016 OPEB expense.

Correct Answer
verified

On January 1, 2015, a company had $84,000 of unrecognized prior service cost. The years-of-future-service method of amortization is used. The company has seven employees, as indicated below: What amount of prior service cost should be included in pension expense for 2015?

Correct Answer
verified

Two were expected to retire at the end of 2020, two more at the end of 2022, and four at the end of 2024. Required: Using the years-of-future-service method, compute the amount of prior service cost to be amortized in the first year.

Correct Answer
verified
$24,000, d...
View Answer

What four alternative methods for accounting for prior service cost were considered by accounting regulators?

Correct Answer
verified
1) Account for it prospectively
2) Recog...
View Answer

In 2015, the Rachel Company initiated a defined benefit pension plan. It recorded $240,000 as pension expense and paid $280,000 to a funding agency. As a result, Rachel will report

Correct Answer
verified

Under contributory plans the employees bear the majority of the risks of the plan and contribute towards the plan with deductions from their salaries.

Correct Answer
verified

What five alternatives were examined by regulators to determine which best met the recognition-measurement criteria of a liability?

Correct Answer
verified
1) Contribution based on an ac...
View Answer

Which of the following statements is true regarding a defined benefit pension plan?

Correct Answer
verified

Which of the following items attributable to a defined benefit pension plan would be recognized on a company's balance sheet?

Correct Answer
verified

Correct Answer
verified
a. Average remaining service l...
View Answer

GAAP requires that a company accrue the cost of other post-retirement benefits OPRBs) during the periods in which its employees earn the benefits.

Correct Answer
verified

Which statement is false?

Correct Answer
verified

The accumulated benefit obligation ABO) is equal to the

Correct Answer
verified

Exam 19: Accounting for Post-Retirement Benefits

In June of 2011, IASB amended IAS 19, Employee Benefits, changing its method of accounting for pensions in order to make the accounting for pensions similar under U.S. GAAP and IFRS.

Correct AnswerverifiedShow Answer

Marjorie, Inc.'s records contained the following data as of December 31, 2016, on its OPEB plan: Required: a. Compute the OPEB expense for 2016. b. Prepare the journal entry to record the 2016 OPEB expense.

Correct AnswerverifiedShow Answer

On January 1, 2015, a company had $84,000 of unrecognized prior service cost. The years-of-future-service method of amortization is used. The company has seven employees, as indicated below: What amount of prior service cost should be included in pension expense for 2015?

Correct AnswerverifiedShow Answer

Two were expected to retire at the end of 2020, two more at the end of 2022, and four at the end of 2024. Required: Using the years-of-future-service method, compute the amount of prior service cost to be amortized in the first year.

Correct Answerverified$24,000, d...View AnswerShow Answer

What four alternative methods for accounting for prior service cost were considered by accounting regulators?

Correct Answerverified1) Account for it prospectively2) Recog...View AnswerShow Answer

In 2015, the Rachel Company initiated a defined benefit pension plan. It recorded $240,000 as pension expense and paid $280,000 to a funding agency. As a result, Rachel will report

Correct AnswerverifiedShow Answer

Under contributory plans the employees bear the majority of the risks of the plan and contribute towards the plan with deductions from their salaries.

Correct AnswerverifiedShow Answer

What five alternatives were examined by regulators to determine which best met the recognition-measurement criteria of a liability?

Correct Answerverified1) Contribution based on an ac...View AnswerShow Answer

Which of the following statements is true regarding a defined benefit pension plan?

Correct AnswerverifiedShow Answer

Which of the following items attributable to a defined benefit pension plan would be recognized on a company's balance sheet?

Correct AnswerverifiedShow Answer

Correct Answerverifieda. Average remaining service l...View AnswerShow Answer

GAAP requires that a company accrue the cost of other post-retirement benefits OPRBs) during the periods in which its employees earn the benefits.

Correct AnswerverifiedShow Answer

Which statement is false?

Correct AnswerverifiedShow Answer

The accumulated benefit obligation ABO) is equal to the

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$24,000, d...
View Answer

Correct Answer
verified
1) Account for it prospectively
2) Recog...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
1) Contribution based on an ac...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a. Average remaining service l...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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