exam 3 material

ch 19, 21, 22

when is the balance of the net gain or loss account subject to amortization?

a. never. the net gain or loss account remains unrecognized

b. when it equals 10% of the beg. bal. of the projected benefit obligation

c. when it equals 10% of the beg. bal. of the market-related value of the plan assets

d. when it exceeds 10% of the larger of the beg. bal. of the projected benefit obligation or the market-related value of the plan assets

d.

the ending bal. in the Pension Asset/Liability is the difference between the:

a. projected benefit obligation and the market-related asset value

b. projected benefit obligation and the fair value of plan assets

c. accumulated benefit obligation and the market-related asset value

d. accumulated benefit obligation and the fair value of plan assets

b.

Appalachian Co. maintains a defined-benefit pension plan for its employees. At each balance sheet date, they should report a pension asset/liability equal to the:

a. accumulated benefit obligation

b. funded status relative to the projected benefit obligation

c. projected benefit obligation

d. actual return on the plan assets

b.

which of the following results from unexpected decreases in the pension obligation?

a. liability gains

b. asset gains

c. asset losses

d. liability losses

a.

the FASB prefers that unrecognized prior service cost be amortized using the:

a. double-declining balance method

b. sum-of-the-years’ digits method

c. years-of-service method

d. straight-line method

c.

in a defined benefit plan, the funding level depends on all of the following factors EXCEPT:

a. interest earnings

b. compensation levels

c. age of the employer company

d. turnover

c.

which of the following may decrease the annual pension expense amount?

a. amortization of prior service cost

b. interest on the liability

c. actual return on plan assets

d. service cost

c.

which of the following is NOT included in determining the balance of plan assets?

a. expected return

b. employer contributions

c. benefits paid

d. actual returns

a.

prior service cost is amortized on a:

a. straight line basis over the expected future years of service

b. years-of-service method or on a straight-line basis

c. straight-line basis over 15 years

d. straight-line bais over the average remaining service life of active employees or 15 years, whichever is longer

b.

when preparing the journal entry with a plan amendment, if the pension liability exceeds the unrecognized prior service cost:

a. the Additional Pension Liability account is decreased

b. no entry is necessary to record the liability

c. the excess is debited to Other Comprehensive Income (PSC)

d. the Additional Pension Liability account is credited for the amount of the unrecognized prior service cost

c.