Intermediate Accounting Theory and Practice
X 120C Intermediate Accounting Theory & Practice
Winter 2013
Quiz 2
Chapter 20
Chapter 21
True-False Conceptual – 40 questions
Multiple Choice Conceptual – 40 questions
STUDENT NAME:__RUPALI KAYPEE_______________________________
TRUE-FALSE—Conceptual
Chapter 20
1. A pension plan is contributory when the employer makes payments to a funding agency. F
2. Qualified pension plans permit deductibility of the employer’s contributions to the pension fund. T
3. An employer does not have to report a liability on its balance sheet in a defined-benefit plan. F
4. Employers are at risk with defined-benefit plans because they must contribute enough to meet the cost of benefits that the plan defines.T
5. Companies compute the vested benefit obligation using only vested benefits, at current salary levels. T
6. The accumulated benefit obligation bases the deferred compensation amount on both vested and nonvested service using future salary levels. F
7. Service cost is the expense caused by the increase in the accumulated benefit obligation because of employees’ service during the current year. F
8. The interest component of pension expense in the current period is computed by multiplying the settlement rate by the beginning balance of the projected benefit obligation. T
9. Companies recognize the accumulated benefit obligation in their accounts and in their financial statements. F
10. The Pension Asset / Liability account balance equals the difference between the projected benefit obligation and the fair value of pension plan assets. T
11. Companies should recognize the entire increase in projected benefit obligation due to a plan initiation or amendment as pension expense in the year of amendment. F
12. The FASB requires only the years-of-service method for
Winter 2013
Quiz 2
Chapter 20
Chapter 21
True-False Conceptual – 40 questions
Multiple Choice Conceptual – 40 questions
STUDENT NAME:__RUPALI KAYPEE_______________________________
TRUE-FALSE—Conceptual
Chapter 20
1. A pension plan is contributory when the employer makes payments to a funding agency. F
2. Qualified pension plans permit deductibility of the employer’s contributions to the pension fund. T
3. An employer does not have to report a liability on its balance sheet in a defined-benefit plan. F
4. Employers are at risk with defined-benefit plans because they must contribute enough to meet the cost of benefits that the plan defines.T
5. Companies compute the vested benefit obligation using only vested benefits, at current salary levels. T
6. The accumulated benefit obligation bases the deferred compensation amount on both vested and nonvested service using future salary levels. F
7. Service cost is the expense caused by the increase in the accumulated benefit obligation because of employees’ service during the current year. F
8. The interest component of pension expense in the current period is computed by multiplying the settlement rate by the beginning balance of the projected benefit obligation. T
9. Companies recognize the accumulated benefit obligation in their accounts and in their financial statements. F
10. The Pension Asset / Liability account balance equals the difference between the projected benefit obligation and the fair value of pension plan assets. T
11. Companies should recognize the entire increase in projected benefit obligation due to a plan initiation or amendment as pension expense in the year of amendment. F
12. The FASB requires only the years-of-service method for