Question : 1.APB Opinion No. 8 set minimum and maximum limits the : 1242709

1.APB Opinion No. 8 set minimum and maximum limits on the annual provision for pension cost. An amount that was always included in the calculation of both the minimum and the maximum limit is

a.Normal cost

b.Amortization of past service cost

c.Interest on unfunded past and prior service costs

d.Retirement benefits paid

2.In accounting for a pension plan, any difference between the pension cost charged to expense and the payments into the fund should be reported as

a.An offset to the liability for prior service cost

b.Accrued or prepaid pension cost

c.An operating expense in this period

d.An accrued actuarial liability

3.Benefits under a pension plan that are not contingent upon an employee’s continuing service are

a.Granted under a plan of defined contribution

b.Based upon terminal funding

c.Actuarially unsound

d.Vested

4.According to SFAS No. 87, “Employer’s Accounting for Pensions,” gains and losses should be

a.Fully allocated to current and future periods

b.Offset against pension expense in the year of occurrence

c.Allocated if any unrecognized gain or loss at the beginning of the year is in excess of 10 percent of the greater of the projected benefit obligation or the market value of the plan assets

d.Disclosed in a note to the financial statements only

5.According to SFAS No. 87, prior service costs should be

a.Charged to retained earnings as a cost relating to the past

b.Amortized over the service period of each employee expected to receive benefits

c.Taken into consideration only by expensing interest on the unfunded amount

d.Recorded in full as a liability at their discounted present value

6.According to SFAS No. 87, which of the following is never recorded as a component of annual pension cost?

a.Amortization of the intangible asset recorded as the offset to the minimum pension liability

b.Amortization of prior service cost

c.Amortization of gains and losses

d.Amortization of the transition amount

7.In determining whether to accrue employee’s compensation for future absences, among the conditions that must be met are that the obligation relates to rights that

AccumulateVest

a.NoNo

b.No  Yes

c.Yes No

d.YesYes

8.The funded status of a defined benefit pension plan is equal to the

a.Vested benefit obligation minus the fair value of the pension plan assets.

b.Accumulated benefit obligation minus the fair value of the pension plan assets.

c.Projected benefit obligation minus the fair value of the pension plan assets.

d.Projected benefits plus the fair value of the pension plan assets minus employer contributions to the pension plan.

9.If the projected benefit obligation of a defined benefit pension plan exceeds the fair value of the pension plan assets, the employer must report

a.The difference as a liability in the balance sheet and a corresponding adjustment to the amount of pension expense reported in earnings.

b.The difference as a liability in the balance sheet and a corresponding adjustment to other comprehensive income, net of deferred income taxes .

c.The difference as an asset in the balance sheet and a corresponding adjustment to the amount of pension expense reported in earnings.

d.The difference as an asset in the balance sheet and a corresponding adjustment to other comprehensive income, net of deferred income taxes.

10.The funded status of a defined benefit pension plan is reported in the balance sheet.

a.As an asset, if the pension plan is underfunded.

b.As a liability, if the pension plan is underfunded.

c.Because it measures the minimum pension plan liability.

d.When it exceeds the projected benefit obligation.