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Flashcards in 13 D Wrong Answers Deck (14):
0

What is the journal entry when a pension is underfunded?

Other comprehensive income. Xxx
Accrued pension liability. Xxx

1

Where is other comprehensive income closed to?

Accumulated other comprehensive income

2

What is the journal entry to record a pension expense?

Pension expense. Xxx
Accrued liability. Xxx

3

What is the journal entry when a payment is made and the pension in overfunded?

Prepaid pension expense. Xxx
Pension expense. Xxx
Cash. Xxx

4

Year end PBO calculation (that's not footnote disclosure)

Beginning PBO
+ service cost
+ interest cost
- benefits paid
_____________
= Year end PBO

5

End of year PBO calculation that's a footnote disclosure

Includes all components in calculation (unlike financial statement
Figure)

6

Which of the following are required disclosures for defined benefit plans?
1 the weighted average discount rate

2 the estimates of future contributions for the next 5 years

Weighted average discount rate is required

The estimates of future contributions for the next 5 years is
Not required

7

The assumed discount rate should reflect rates which pension benefits could be...

2) what is this rate referred to as?

Effectively settled

2) settlement rate

8

To determine the settlement rate (discount rate of pension benefits), it is appropriate to look at...

Rates implicit in current prices of annuity contracts that could be
Used to settle obligation under defined benefit plan

9

Is the discount rate used to calculate the projected benefit obligation determined by a) expected return on plan assets of b) actual return on plan assets?

Neither

10

Recognized pension liability calculation

Recognized pension liability = pension cost - pension contribution

11

Out of the 3 below, which of the following must be disclosed in defined benefit pension plans?
1 assumed discount rate
2 expected long term rate of return on all the employer's assets
3 rate of compensation increase

Assumed discount rate and rate of compensation increase
Must be included

12

In a defined benefit plan, rates for assumed discount rate of compensation increase and expected long term rate of return on plan assets. Should this be disclosed in the notes?

Yes should be disclosed

13

In a company's defined benefit pension plan, a reconciliation of the accrued or prepaid pension cost reported in its balance sheet with the pension expense reported in its income statement. Should this be disclosed in the notes?

Not required to disclose