Chapter 14
Multiple Choice
1. APB Opinion No. 8 set minimum and maximum limits on the annual provision for pension cost.
An amount that was always included in the calculation of both the minimum and the maximum
limit is
2. In accounting for a pension plan, any difference between the pension cost charged to expense and
the payments into the fund should be reported as
3. Benefits under a pension plan that are not contingent upon an employee’s continuing service are
4. According to SFAS No. 87, “Employer’s Accounting for Pensions,” gains and losses should be
5. According to SFAS No. 87, prior service costs should be
6. According to SFAS No. 87, which of the following is never recorded as a component of annual
pension cost?
7. In determining whether to accrue employee’s compensation for future absences, among the
conditions that must be met are that the obligation relates to rights that
Accumulate Vest
8. The funded status of a defined benefit pension plan is equal to the
9. If the projected benefit obligation of a defined benefit pension plan exceeds the fair value of the
pension plan assets, the employer must report
10. The funded status of a defined benefit pension plan is reported in the balance sheet.
11. Some theorists argue that the best measure of the employer’s defined benefit pension plan
obligation is the accumulated benefit obligation.
12. benefits that are not contingent on the employee continuing in the service of the company are
13. The corridor approach
14. What effect did the requirement to replace the minimum liability requirement with the funded
status of a pension plan have for underfunded pension plans?
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15. What effect did the requirement to replace the minimum liability requirement with the funded
status of a pension plan have for overfunded pension plans?.
16. Which of the following is not a difference between defined benefit pension plans and other
postretirement benefits (OPBs)
17. The expected postretirement benefit obligation (EPBO) is
Essay
1. Discuss the difference between defined benefit and defined contribution pension plans.
2. Discuss the cost approach and benefits approach actuarial funding methods.
3. Define the following components of pension cost: under SFAS No. 87 (FASB ASC 715):
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4. What four categories of information are required to be disclosed under the provisions of SFAS
No. 35 (FASB ASC 960)?
5. Discuss the characteristics that make accounting for other postretirement benefits more difficult
than accounting for pensions.
6. What changes in accounting for pensions were required by SFAS No. 158 (FASB ASC 715)?
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7. Discuss the differences between defined benefit pension plans (DBPP) and other postretirement
benefit plans (OPBP) with respect to:
a. How they are funded
b. The amount of benefits received
c. How the benefit amount is paid
d. Actuarial predictability of an individual plan