171.A capital lease is recorded in the accounting records of the lessee by an entry:
A.Debiting Rent Expense and crediting Cash each time a lease payment is made.
B.Debiting Cash and crediting Rental Revenue each time a lease payment is received.
C.Debiting an asset account and crediting a liability account for the present value of the future lease payments.
D.Debiting an asset account and crediting Sales for the present value of the future lease payments.
172.A company with a fully funded pension plan:
A.Recognizes no pension expense.
B.Reports no long-term liability for future pension payments.
C.Does not utilize the services of a trustee to operate the pension plan.
D.Recognizes pension expense equal to the cash payments made to retirees during the current period.
173.In estimating annual pension expense, which of the following factors would not be taken into consideration?
A.Current financial condition of the company.
B.Expected rate of return to be earned on pension fund assets.
C.Employee turnover rates.
D.Compensation levels and estimated rate of pay increases.
174.Pension expense is:
A.The present value of the estimated future pension benefits earned by employees as a result of their services during the period.
B.The amount funded to the pension in a given year.
C.The future value of rights granted to employees as a result of their services during the period.
D.The amount withdrawn from the pension fund to pay retirees during the period.
175.Which of the following is not true about post-retirement benefits?
A.Post-retirement costs should be recognized as expense as the workers earn the right to receive the benefits.
B.Most corporations have fully funded their post-retirement benefits.
C.Unfunded post-retirement costs are a non-cash expense.
D.A corporation's liability for post-retirement benefits is equal to the present value of estimated future payments.
176.A liability for deferred income taxes represents:
A.Income taxes on earnings already reported in the income statement, but that will be taxed in future periods.
B.Income taxes already paid on earnings which have not yet been reported in the company's income statement.
C.Income tax obligations being disputed with the Internal Revenue Service.
D.Income taxes levied in prior years which are now past due.
177.Using different accounting methods on financial statements and tax returns will create:
A.No effect upon the balance sheet, only the income statement.
B.No effect upon the balance sheet nor the income statement.
C.A deferred tax liability.
D.An illegal situation.
178.Deferred taxes are classified as:
A.Only a liability.
B.Only an asset.
C.Either an asset or liability, depending upon the situation.
D.A non-operating expense.
