Question 1

Which of the following brought accrual accounting to post retirement benefits other than pensions (OPEB)?

Accepted Answer

A)  SFAS No. 87 
B)  SFAS No. 106 
C)  SFAS No. 132 
D)  ERISA 
A)  SFAS No. 87 
B)  SFAS No. 106 
C)  SFAS No. 132 
D)  ERISA B

Question 2

Actuaries are often consulted to determine annual contribution levels for a defined contribution plan.

Accepted Answer

A) True 
 B)False  False

Question 3

What was the main argument of APB Opinion 8?

Accepted Answer

A)  ERISA did not create a pension liability except in the likelihood of plan termination. 
B)  The cost of providing pension benefits should be spread over the remaining service life of employees. 
C)  Pension expense should be computed using any one of five acceptable accumulated benefit methods, regardless of cash contributions. 
D)  The balance sheet should report unfunded vested benefits. 
A)  ERISA did not create a pension liability except in the likelihood of plan termination. 
B)  The cost of providing pension benefits should be spread over the remaining service life of employees. 
C)  Pension expense should be computed using any one of five acceptable accumulated benefit methods, regardless of cash contributions. 
D)  The balance sheet should report unfunded vested benefits. C

Question 4

Accounting for defined contribution plans is more complex than accounting for defined benefit plans.

Accepted Answer

A) True 
 B)False

Question 5

In SFAS No. 87, the asset-liability orientation is evident in both expense measurement and the balance sheet recognition of unfunded pension benefits.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is not true related to OPEBs?

Accepted Answer

A)  Explicit health care trending makes OPEB accounting somewhat similar to the projected benefit obligation approach to pensions. 
B)  Housing subsidies may be included in OPEBs. 
C)  SFAS No. 106 requires recognition of OPEB costs and obligations. 
D)  Prior to SFAS No.106, OPEBs were handled on an accrual basis of accounting. 
A)  Explicit health care trending makes OPEB accounting somewhat similar to the projected benefit obligation approach to pensions. 
B)  Housing subsidies may be included in OPEBs. 
C)  SFAS No. 106 requires recognition of OPEB costs and obligations. 
D)  Prior to SFAS No.106, OPEBs were handled on an accrual basis of accounting.

Question 7

Which of the following statements applies to an involuntary termination?

Accepted Answer

A)  The sponsor has a legal liability under ERISA for all accrued benefits. 
B)  The sponsor has a legal liability under ERISA for all vested benefits but not for unvested benefits. 
C)  The sponsor has a legal liability under ERISA only for PBGC guaranteed benefits. 
D)  None of the above statements apply to an involuntary termination. 
A)  The sponsor has a legal liability under ERISA for all accrued benefits. 
B)  The sponsor has a legal liability under ERISA for all vested benefits but not for unvested benefits. 
C)  The sponsor has a legal liability under ERISA only for PBGC guaranteed benefits. 
D)  None of the above statements apply to an involuntary termination.

Question 8

The FASB took an enormous step in SFAS No. 106 by requiring the recognition and measurement of OPEB costs and obligations.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not true regarding SFAS 158?

Accepted Answer

A)  It brought the overfunded and underfunded status of defined benefit plan to the footnotes of the balance sheet. 
B)  It required certain costs be charged to other comprehensive income. 
C)  It requires a credit to other pension income for amortized prior service costs. 
D)  An overfunded or underfunded amount for OPEBs must be shown as an asset or liability on the balance sheet. 
A)  It brought the overfunded and underfunded status of defined benefit plan to the footnotes of the balance sheet. 
B)  It required certain costs be charged to other comprehensive income. 
C)  It requires a credit to other pension income for amortized prior service costs. 
D)  An overfunded or underfunded amount for OPEBs must be shown as an asset or liability on the balance sheet.

Question 10

SFAS No. 112 requires that postemployment costs be handled on an actuarial basis.

Accepted Answer

A) True 
 B)False

Question 11

The main change brought about by SFAS No. 158 was to bring the overfunded or underfunded status of a defined benefit plan to the footnotes of the balance sheet.

Accepted Answer

A) True 
 B)False

Question 12

Membership in defined benefit plans is declining relative to membership in defined contribution plans.

Accepted Answer

A) True 
 B)False

Question 13

The core of SFAS No. 106 is the need to predict future health care costs.

Accepted Answer

A) True 
 B)False

Question 14

A shift toward the asset-liability orientation is evident in pension reporting requirements, with both expense measurement and the requirement to recognize a minimum balance sheet liability for unfunded pension benefits.

Accepted Answer

A) True 
 B)False

Question 15

What was the first pension accounting standard?

Accepted Answer

A)  FASB Interpretation 3 
B)  ARB 36 
C)  SFAS No. 87 
D)  ERISA 
A)  FASB Interpretation 3 
B)  ARB 36 
C)  SFAS No. 87 
D)  ERISA

Question 16

Financial statement preparers strongly opposed OPEB recognition.

Accepted Answer

A) True 
 B)False

Question 17

Vesting refers to a qualifying period of pension plan membership that must be met before contributions are made by the employer.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following accounting standards began a shift toward an asset-liability orientation in pension reporting?

Accepted Answer

A)  APB Opinion 8 
B)  SFAS No. 87 
C)  SFAS No. 106 
D)  SFAS No. 132 
A)  APB Opinion 8 
B)  SFAS No. 87 
C)  SFAS No. 106 
D)  SFAS No. 132

Question 19

When a pension plan commences, credit is often granted to employees for past years of service, giving rise to what is called:

Accepted Answer

A)  Unfunded past service cost. 
B)  Unfunded benefits. 
C)  Unfunded actuarial liability. 
D)  All of the above 
A)  Unfunded past service cost. 
B)  Unfunded benefits. 
C)  Unfunded actuarial liability. 
D)  All of the above

Question 20

Explain in general terms how defined benefit pension plans are funded.

Accepted Answer

When benefits of a defined benefit plan

Which of the following brought accrual accounting to post retirement benefits other than pensions (OPEB)?

Actuaries are often consulted to determine annual contribution levels for a defined contribution plan.

What was the main argument of APB Opinion 8?

Accounting for defined contribution plans is more complex than accounting for defined benefit plans.

In SFAS No. 87, the asset-liability orientation is evident in both expense measurement and the balance sheet recognition of unfunded pension benefits.

Which of the following is not true related to OPEBs?

Which of the following statements applies to an involuntary termination?

The FASB took an enormous step in SFAS No. 106 by requiring the recognition and measurement of OPEB costs and obligations.

Which of the following is not true regarding SFAS 158?

SFAS No. 112 requires that postemployment costs be handled on an actuarial basis.

The main change brought about by SFAS No. 158 was to bring the overfunded or underfunded status of a defined benefit plan to the footnotes of the balance sheet.

Membership in defined benefit plans is declining relative to membership in defined contribution plans.

The core of SFAS No. 106 is the need to predict future health care costs.

A shift toward the asset-liability orientation is evident in pension reporting requirements, with both expense measurement and the requirement to recognize a minimum balance sheet liability for unfunded pension benefits.

What was the first pension accounting standard?

Financial statement preparers strongly opposed OPEB recognition.

Vesting refers to a qualifying period of pension plan membership that must be met before contributions are made by the employer.

Which of the following accounting standards began a shift toward an asset-liability orientation in pension reporting?

When a pension plan commences, credit is often granted to employees for past years of service, giving rise to what is called:

Explain in general terms how defined benefit pension plans are funded.

An Introduction to Accounting Theory

Accounting Theory and Accounting Research

Development of Institutional Structure of Financial Accounting

The Economics of Financial Reporting Regulation

Postulates, Principles, and Concepts

The Search for Objectives

The Fasbs Conceptual Framework

Usefulness of Accounting Information to Investors and Creditors

Uniformity and Disclosure: Some Policy Making Directions

International Accounting

The Balance Sheet

The Income Statement

Statements of Cash Flows

Accounting for Inflation and Changing Prices

Income Taxes and Financial Accounting

Leases

Intercorporate Equity Investments

Filters

Exam 16: Pensions and Other Postretirement Benefits

Which of the following brought accrual accounting to post retirement benefits other than pensions (OPEB)?

Actuaries are often consulted to determine annual contribution levels for a defined contribution plan.

What was the main argument of APB Opinion 8?

Accounting for defined contribution plans is more complex than accounting for defined benefit plans.

In SFAS No. 87, the asset-liability orientation is evident in both expense measurement and the balance sheet recognition of unfunded pension benefits.

Which of the following is not true related to OPEBs?

Which of the following statements applies to an involuntary termination?

The FASB took an enormous step in SFAS No. 106 by requiring the recognition and measurement of OPEB costs and obligations.

Which of the following is not true regarding SFAS 158?

SFAS No. 112 requires that postemployment costs be handled on an actuarial basis.

The main change brought about by SFAS No. 158 was to bring the overfunded or underfunded status of a defined benefit plan to the footnotes of the balance sheet.

Membership in defined benefit plans is declining relative to membership in defined contribution plans.

The core of SFAS No. 106 is the need to predict future health care costs.

A shift toward the asset-liability orientation is evident in pension reporting requirements, with both expense measurement and the requirement to recognize a minimum balance sheet liability for unfunded pension benefits.

What was the first pension accounting standard?

Financial statement preparers strongly opposed OPEB recognition.

Vesting refers to a qualifying period of pension plan membership that must be met before contributions are made by the employer.

Which of the following accounting standards began a shift toward an asset-liability orientation in pension reporting?

When a pension plan commences, credit is often granted to employees for past years of service, giving rise to what is called:

Explain in general terms how defined benefit pension plans are funded.

An Introduction to Accounting Theory

Accounting Theory and Accounting Research

Development of Institutional Structure of Financial Accounting

The Economics of Financial Reporting Regulation

Postulates, Principles, and Concepts

The Search for Objectives

The Fasbs Conceptual Framework

Usefulness of Accounting Information to Investors and Creditors

Uniformity and Disclosure: Some Policy Making Directions

International Accounting

The Balance Sheet

The Income Statement

Statements of Cash Flows

Accounting for Inflation and Changing Prices

Income Taxes and Financial Accounting

Leases

Intercorporate Equity Investments

Filters