1. True or False: For a defined contribution pension plan, the employee bears the investment risk.
2. True or False: The expense account used when options are expensed is Compensation Expense.
3. True or False: Basic earnings per share calculations rely on the hypothetical exercise of any dilutive stock options that are outstanding.
4. True or False: The annual pension journal entry would normally include a debit to Pension Expense.
5. True or False: Stock options are dilutive if the exercise price exceeds the average market price of the stock for the year.
6. True or False: The service period is the expected number of years the employee will receive retirement benefits.
7. True or False: For our limited scope of coverage of the pension chapter, the pension expense is equal to the service cost plus the interest cost plus the expected return on the pension plan assets.
8. True or False: Most changes in accounting principle are accounted for the retrospective method.
9. True or False: If the Pension-Related Asset/Liability account has a debit balance at the end of the year, the projected benefit obligation exceeds the fair value of the pension plan assets.
10. If options expire without having been exercised, the Compensation Expense recorded for those options is reversed out.