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ervice cost is the expense caused by the increase in the accumulated benefit obligation because of employees' service during the current year Question 1: True
ervice cost is the expense caused by the increase in the accumulated benefit obligation because of employees' service during the current year Question 1: True or false. 1. S 2. The difference between the PBO and the ABO is that the PBO takes into account future salary increases, while the ABO is based on current salaries. rve 3. Prior service cost is the increase in the PBO because of pension plan amendments 4. Other Comprehensive Income (PSC) is reported as part of net income. 5. One of the main differences in pension accounting between US GAAP and IFRS is that the return on pension assets discount rate, rather than the expected rate of return on pension assets. recognized in pension expense under IFRS is based on the 6. Executory costs should be excluded by the lessee in computing the present value of the minimum lease payments. 7. A lessee records interest expense in both a capital lease and an operating lease. 8. The distinction between a direct-financing lease and a sales-type lease is the presence or absence of a transfer of title. Direct-financing leases are in substance the financing of an asset purchase by the lessee. residual value will be realized whether it is guaranteed or not. the change in the current year's income statement. restate prior years' financial statements flows from operating activities. investing activities. 9. 10. The lessor's accounting for leases with a residual value is based on the assumption that the 11. When a company changes an accounting principle, it should report the cumulative effect of 12. If a company changes accounting estimates, such as the useful life of a machine, it should 13. Companies report the cash flows from purchases and sales of trading securities as cash 14. Dividends received from other companies' stocks should be reported as cash flow from 15. Interest paid to creditors should be reported as cash flows from financing activities
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