1.What is the difference between the projected benefit obligation (PBO) and the accumulated benefit obligation (ABO)?

Select one:

a.The PBO recognizes future salary increases, while the ABO does not.

b.The ABO recognizes future salary increases, while the PBO does not.

c.The PBO recognizes only obligations that have vested.

d.The ABO recognizes only obligations that have vested.

e.Only the name; the two concepts are identical.

2.Lease A has no bargain purchase option, and the present value of the minimum lease payments is 86% of the fair value of the leased asset. Lease B does not transfer ownership to the lessee at the end of the lease, and the lease term is 80% of the economic life of the leased asset. How should these two leases be treated?

Select one:

a.Both are Operating Leases.

b.Both are Capital Leases.

c.Lease A is a Capital Lease, Lease B is an Operating Lease.

d.Lease A is an Operating Lease, Lease B is a Capital Lease

3.On October 1, 2018, a firm issued $200,000 of 9% bonds. The bonds were dated January 1, 2018. Interest is paid annually on 12/31. A total of $210,500 in cash was received, which included accrued interest. What amount of premium or discount is associated with these bonds?

Select one:

a.$10,500 premium

b.$1,500 premium

c.$2,000 premium

d.$3,000 discount

e.$13,500 premium