QUESTION 32 A company using the last-in first-out inventory method during a period of rising prices suggests that a revenues & net income would be higher than using FIFO b. cost of goods sold would be higher & income tax lower than using FIIFO ) C. cost of goods sold would be lower & net income higher than using FIFO d. revenuess & net income would be lower than using FIFO QUESTION 33 Company incentives for using a defined benefit pension plan include: is always cheaper than a defined contribution plan a. b. Paternalistic attitude to employees, since employer maintains all obligation risks, or potential for earnings management c. Pension expenses are never reported on the income statement d. Employer has no future liability beyond contributions QUESTION 34 ABC Co. uses a defined benefit pension plan. At year-end the pension obligation is $57.8 million and plan assets $46.9 million. This plan is: a. Bankrupt b. Committed to expend an additional $104.7 million c. Overfunded by $10.9 million d. Underfunded by $10.9 million QUESTION 35 Generally, the long-term impact of issuing stock options to employees is: a. Compensation expense recorded when exercised for the full exercise price b. The cost of stock options is recorded directly to retained earnings c. Dilution of equity, since compensation expense is usually not recorded d. Stock options are almost never exercised by employees