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Alternative methods exist for the measurement of the pension obligation (liability). Which measure requires the use of future salaries in its computation? a. Vested benefit
Alternative methods exist for the measurement of the pension obligation (liability). Which measure requires the use of future salaries in its computation? a. Vested benefit obligation. b. Accumulated benefit obligation. c. Projected benefit obligation. d. Restructured benefit obligation. The relationship between the amount funded and the amount reported for pension expense is as follows: a. pension expense must equal the amount funded. b. pension expense will be less than the amount funded. c. pension expense will be more than the amount funded. D. pension expense may be greater then, equal to, or less than the amount funded. The interest on the projected benefit obligation component of pension expense a. reflects the incremental borrowing rate of the employer. b. reflects the rates at which pension benefits could be effectively settled. c. is the same as the expected return on plan assets. d. may be stated implicitly or explicitly when reported. A corporation has a defined-benefit plan. An accrued pension liability will result at the end of the first year if the a. accumulated benefit obligation exceeds the fair value of the plan assets. b. fair value of the plan assets exceeds the accumulated benefit obligation. c. amount of employer contributions exceeds the net periodic pension cost. d. amount of net periodic pension cost exceeds the amount of employer contributions. When a company adopts a pension plan, prior service costs should be charged to a. operations of current and future periods. b) operations of prior periods. c. operations of the current period. d. retained earnings
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