For the following assignment answer the following statements Pension benefits re
ID: 2467141 • Letter: F
Question
For the following assignment answer the following statements
Pension benefits represent deferred compensation for current service.
A) True
B) False
2. Pension costs are recognized on an accrual basis over the years employees earn pension benefits.
A) True
B) False
3. Almost all new pension plans pay defined benefits.
A) True
B) False
4. Defined contribution plans require employers to make fixed payments to but not from a pension fund.
A) True
B) False
5. Defined contribution retirement benefits paid to retired employees dependend on how well the pension plan actaully performs.
A) True
B) False
6. In chapter 17, our text's authors seem to suggest that actual results rarely differ from actuarial estimates.
A) True
B) False
7. US GAAP requires that corporations report both pension plan assets and liabilities on their balance sheets.
A) True
B) False
8. Our text indicates that actuarial estimates of projected benefits may be more reliable than actuartial estimates of accumulated benefits.
A) True
B) False
9. In Illustraton 17-6A on page 1005, retirement benefits have been discounted at 6%.
A) True
B) False
10.Retroactive changes to the way pension benefits are determeined can result in prior service costs.
A) True
B) False
11. When calculating the present value of retirement benefits, lower discount rates reduce PBO estimates.
A) True
B) False
12. Retriement benefits paid to employees always reduce projected benefit obligations.
A) True
B) False
13. In chapter 17, our authors suggest that today, it's very unusual for pension plans to be underfunded.
A) True
B) False
14. A company's PBO is reported as a separate libilitiy on its balance sheet.
A) True
B) False
15. Pension expense calculatons are made using expected returns on plan assets.
A) True
B) False
16. Prior service costs are amortized over time, not immediately expensed when incurred.
A) True
B) False
17. Gains or losses arise whenever the PBO or return on plan assets turn out to be different than expected.
A) True
B) False
18. Amortizing net gains would will make pension expense calculations grow larger.
A) True
B) False
19. Amortized gains and losses are reclassified from OIC to net income.
A) True
B) False
20. Service and interest costs increase PBO calculation.
A) True
B) False
21. Under International Financial Reporting Standards (IFRS) OCI gains and losses are not amortized but accumulate.
A) True
B) False
22. Given an actual return on plan assets of $30 and a gain on plan assets of $3, expected return on plan assets would be $27.
A) True
B) False
23. Given a beginning PBO of $400 and a discount rate of 6%, interest cost would be $24.
A) True
B) False
24.Analysis of exercise 17-8 on page 1043 indicates Sterling Properties earned a $9,000 gain on plan assets in 2016.
A) True
B) False
25. The actual return on plan assets Abbot and Abbot earned in exercise 17-10 was less than their expected return.
A) True
B) False
26. Fahy Transportation's pension expense would include an interest cost of $51.1 million in exercise 17-7.
A) True
B) False
27. In CPA Exam Question 1 on page 1050, Wolf Inc. would report a net pension liability of $85,000 on its balance sheet.
A) True
B) False
28. The correct answer to CPA Exam Question 8 on page 1051 is letter c.
A) True
B) False
29. Analysis of Judgment Case 17-3 on page 1061 indicates LDG Consulting's pension is overfunded by $405,000 at the end of 2016.
A) True B) False
30.
After studying chapter 17, it would be reasonable to conclude that GM would account for its pension plan amendment in Real World Case 17-9 on page 1063 as a prior service cost.
A) True
B) False
Explanation / Answer
1)True
2)true
3)False
4)True
5)False
6)False
7)True
8)True
9)
10)True