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ADMS 3531 (30)
Lecture

chapter 20

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Department
Administrative Studies
Course
ADMS 3531
Professor
Dale Domian
Semester
Fall

Description
CHAPTER 20 ACCOUNTING FOR PENSIONS AND POSTRETIREMENT BENEFITS IFRS questions are available at the end of this chapter. TRUE-FALSE Conceptual Answer No. Description F 1. Funded pension plan. T 2. Qualified pension plans. F 3. Defined-contribution plan liability. T 4. Defined-benefit plans. T 5. Vested benefit obligation. F 6. Accumulated benefit obligation. F 7. Definition of service cost. T 8. Definition of interest cost. F 9. Recognizing accumulated benefit obligation. T 10. Pension Asset /Liability balance. F 11. Plan amendment and projected benefit obligation increase. F 12. Years-of-service amortization method. T 13. Expected return and actual return. F 14. Unexpected gains and losses. T 15. Accumulated OCI (G/L) account and the corridor. F 16. Amortization of net gains and losses. T 17. Recording prior service cost. F 18. Reporting accumulated OCI (PSC) on the balance sheet. F 19. Other comprehensive income (PSC) and net income. T 20. Reconciliation of PBO and fair value of plan assets. MULTIPLE CHOICE Conceptual Answer No. Description d 21. Factors considered by actuaries. c 22. Process of funding a pension plan. d 23. Accounting problems in pension plans. c 24. Nature of a defined-contribution plan. b 25. Nature of a defined-benefit plan. b 26. Defined-contribution plan characteristics. a 27. Accounting for a defined-benefit plan. c 28. Pension obligation measurement using future salaries. a 29. Definition of accumulated benefit obligation. a 30. Projected benefit obligation as a measure of pension obligation. d 31. Alternative measures of the pension obligation. d 32. Characteristics of vested benefits. d 33. Pension funding and pension expense recognition. a 34. Components of pension expense. c 35. Service cost calculated using future compensation levels. 20-2 Accounting for Pensions and Postretirement Benefits b 36. Settlement interest rates. Accounting for Pensions and Postretirement Benefi20-3 MULTIPLE CHOICE Conceptual (cont.) Answer No. Description a 37. Nature of plan assets. b 38. Definition of actual return on plan assets. b 39. Pension Asset / Liability. c 40. Items included in pension expense. a 41. Definition of pension expense. c 42. Recognition of prior service costs. c 43. Amortization of prior service costs. b 44. Amortization methods for prior service costs. a 45. Defined-benefit plan amendment. d 46. Unexpected gains and losses. b 47. Recording gains and losses. a 48. Use of fair value of plan asset. a 49. Gain or loss caused by a plant closing. a 50. Reporting pension asset. d 51. Intangible assetdeferred pension cost. a 52. Identification of a balance sheet account. a 53. Recognition of pension asset. b 54. Disclosures of pension plan information. c 55. Function of Pension Benefit Guaranty Corporation. c *56. Postretirement health care benefits. c *57. Disclosures of postretirement benefits. c *58. Postretirement asset. a *59. Postretirement benefits. c *60. Accrual period. b *61. Expected postretirement benefit obligation. d *62. Recognition of prior service cost. b *63. Item not recognized. *This topic is dealt with in an Appendix to the chapter. MULTIPLE CHOICE Computational Answer No. Description d 64. Calculate pension expense. c 65. Calculate pension expense. a 66. Calculate pension expense. b 67. Calculate pension expense. a 68. Determine pension expense. a 69. Determine pension liability to be reported. b 70. Determine amortization of gain / loss. d 71. Calculate pension expense. d 72. Calculate pension expense. b 73. Calculate pension expense. b 74. Calculate actual return on plan assets. a 75. Calculate unexpected gain on plan assets. d 76. Calculate net loss amortization. 20-4 Accounting for Pensions and Postretirement Benefits MULTIPLE CHOICE Computational Answer No. Description b 77. Calculate projected benefit obligation balance. c 78. Calculate fair value of plan assets. b 79. Calculate amortization of prior service cost. c 80. Calculate interest cost. b 81. Determine actual return on plan assets. c 82. Calculate the unexpected gain on plan assets. b 83. Determine the corridor. b 84. Calculate amortization of net gain. a 85. Calculate pension asset / liability recognized in the balance sheet. c 86. Calculate pension liability. d 87. Calculate pension liability. c 88. Calculate pension liability. b 89. Calculate amount of intangible asset. d 90. Calculate pension liability. b 91. Determine pension liability to be reported. d 92. Determine pension asset / liability to be reported. d 93. Determine balance of projected benefit obligation. c 94. Determine fair value of plan assets. d 95. Determine pension asset / liability to be reported. a 96. Determine pension liability to be reported. b *97. Calculate postretirement expense. a *98. Calculate postretirement expense. b *99. Calculate postretirement expense. MULTIPLE CHOICE CPA Adapted Answer No. Description d 100. Determine the projected benefit obligation. b 101. Nature of interest cost. c 102. Determine pension asset / liability to be reported. d 103. Determine pension asset / liability to be reported. a 104. Calculate pension liability. b 105. Calculate pension liability. EXERCISES Item Description E20-106 Pension accounting terminology. E20-107 Pension asset terminology. E20-108 Measuring and recording pension expense.
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