Question

1) The interest component included in pension expense for a defined-benefit pension plan represents the

Select one:

shortage between the expected and actual returns on plan assets.

increase in the projected benefit obligation due to the passage of time.

increase in the fair value of plan assets due to the passage of time.

amortization of the discount on accumulated OCI (PSC).

2)

Frank has accepted a new job which gives him the choice between a defined-benefit and a defined contribution plan. Which of the following is not a characteristic of a defined-contribution pension plan?

Select one:

The benefits to be received by employees are determined by an employee’s highest compensation level defined by the terms of the plan.

The employer's contribution each period is based on a formula.

The accounting for a defined-contribution plan is straightforward and uncomplicated.

The benefit of gain or the risk of loss from the assets contributed to the pension fund is borne by the employee.

Answer 1

1) The interest component included in pension expense for a defined-benefit pension plan represents the

- - -amortization of the discount on accumulated OCI (PSC).

2) Frank has accepted a new job which gives him the choice between a defined-benefit and a defined contribution plan. Which of the following is not a characteristic of a defined-contribution pension plan?

- - - The benefits to be received by employees are determined by an employee’s highest compensation level defined by the terms of the plan.