Question

1.Pension benefits represent deferredcompensation for current service.

A) True
B) False

2.Pension costs are recognized on an accrualbasis over the years employees earn pension benefits.

A) True
B) False

3.Almost all new pension plans pay definedbenefits.

A) True
B) False

4.Defined contribution plans require employersto make fixed payments to but not from a pension fund.

A) True
B) False

5.Defined contribution retirement benefits paidto retired employees dependend on how well the pension planactaully performs.

A) True
B) False

6.In chapter 17, our text's authors seem tosuggest that actual results rarely differ from actuarialestimates.

A) True
B) False

7.US GAAP requires that corporations reportboth pension plan assets and liabilities on their balancesheets.

A) True
B) False

8.Our text indicates that actuarial estimatesof projected benefits may be more reliable than actuartialestimates 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 determeinedcan result in prior service costs.

A) True
B) False

11.

When calculating the present value of retirement benefits, lowerdiscount rates reduce PBO estimates.

A) True
B) False

12.

Retriement benefits paid to employees always reduce projectedbenefit obligations.

A) True
B) False

13. In chapter 17, our authors suggest thattoday, it's very unusual for pension plans to be underfunded.

A) True
B) False

14. A company's PBO is reported as a separatelibilitiy on its balance sheet.

A) True
B) False

15. Pension expense calculatons are made usingexpected returns on plan assets.

A) True
B) False

16. Prior service costs are amortized overtime, not immediately expensed when incurred.

A) True
B) False

17. Gains or losses arise whenever the PBO orreturn on plan assets turn out to be different than expected.

A) True
B) False

18. Amortizing net gains would will makepension expense calculations grow larger.

A) True
B) False

19. Amortized gains and losses are reclassifiedfrom OIC to net income.

A) True
B) False

20. Service and interest costs increase PBOcalculation.

A) True
B) False

21. Under International Financial ReportingStandards (IFRS) OCI gains and losses are not amortized butaccumulate.

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 assetswould be $27.

A) True
B) False

23. Given a beginning PBO of $400 and adiscount rate of 6%, interest cost would be $24.

A) True
B) False

24. Analysis of exercise 17-8 on page 1043indicates Sterling Properties earned a $9,000 gain on plan assetsin 2016.

A) True
B) False

25. The actual return on plan assets Abbot andAbbot earned in exercise 17-10 was less than their expectedreturn.

A) True
B) False

26. Fahy Transportation's pension expense wouldinclude an interest cost of $51.1 million in exercise 17-7.

A) True
B) False

27. In CPA Exam Question 1 on page 1050, WolfInc. would report a net pension liability of $85,000 on its balancesheet.

A) True
B) False

28. The correct answer to CPA Exam Question 8on page 1051 is letter c.

A) True
B) False

29. Analysis of Judgment Case 17-3 on page 1061indicates LDG Consulting's pension is overfunded by $405,000 at theend of 2016.

A) True
B) False

30. After studying chapter 17, it would bereasonable to conclude athat GM would account for its pension planamendment in Real World Case 17-9 on page 1063 as a prior servicecost.

A) True
B) False0