Indicate whether the statement is TRUE OR FALSE, and Whether TRUE or FALSE provi
ID: 2584106 • Letter: I
Question
Indicate whether the statement is TRUE OR FALSE, and
Whether TRUE or FALSE provide at least three (3) considerations (explanations) for your determination of T/F
1. In determining diluted EPS, convertible preferred stock is always dilutive.
2- Due to the risk associated with company bankruptcies, most employees favor defined contribution plans.
3- The FASB’s rationale for requiring immediate expensing of prior service costs at the date of amendment or initiation of a defined benefit plan is the employer has no guarantee that it will receive future benefits.
Explanation / Answer
1. In determining diluted EPS, convertible preferred stock is always dilutive - False
2- Due to the risk associated with company bankruptcies, most employees favor defined contribution plans. - True
Reason - In defined contribution plan risk associated with the employee.
3- The FASB’s rationale for requiring immediate expensing of prior service costs at the date of amendment or initiation of a defined benefit plan is the employer has no guarantee that it will receive future benefits. - False