Devry ACCT 312 Week 2 Quiz Latest

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Devry ACCT 312 Week 2 Quiz Latest

Question 1 Which describes defined benefit pension plans?

The investment risk is borne by the employee.

The plans are simple and easy to construct.

Retirement benefits depend on the individual’s account balance.

The investment risk is borne by the employer.

Question 2. The accounting for defined contribution pension plans is easy, because each year

the employer records pension expense equal to the amount paid out to retirees.

the employer records pension expense based on an amount provided by the actuary.

the employer records pension expense based on the earnings of the plan assets.

the employer records pension expense equal to the annual contribution.

Question 3. Which is not a way of measuring the pension obligation?

Investor benefit obligation

Vested benefit obligation

Accumulated benefit obligation

Projected benefit obligation

Question 4. The PBO is increased by

amortization of prior service cost.

an increase in the actuary’s assumed discount rate.

an increase in the average life expectancy of employees.

a return on plan assets that is lower than expected.

Question 5.Our company has a defined benefit pension plan. On December 31 (the end of the fiscal year), the company received the PBO report from the actuary. The following information was included in the report: ending PBO, $220,000; benefits paid to retirees, $20,000; interest cost, $14,400. The discount rate applied by the actuary was 8%. Which was the beginning PBO?

$180,000

$200,000

$214,400

$224,000

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Devry ACCT 312 Week 2 Quiz Latest