Question 1

Choose the correct statement concerning pensions (defined benefit)and other post-employment benefits.

Accepted Answer

A)  Pension expense has six components; other post-employment benefits expense has only five components. 
B)  Only pensions require a reconciliation of funded status to be disclosed. 
C)  Other post-employment benefits payments are more difficult to predict than are pension payments. 
D)  The entire other post-employment benefits obligation must be recognized in the balance sheet whereas, in most cases, the pension obligation is not. 
A)  Pension expense has six components; other post-employment benefits expense has only five components. 
B)  Only pensions require a reconciliation of funded status to be disclosed. 
C)  Other post-employment benefits payments are more difficult to predict than are pension payments. 
D)  The entire other post-employment benefits obligation must be recognized in the balance sheet whereas, in most cases, the pension obligation is not.

Question 2

All of the following are relevant policy disclosures suggested by the AcSB except:

Accepted Answer

A)  a reconciliation of relevant pension amounts. 
B)  amount of pension expense for the period, broken down by component. 
C)  the number of employees. 
D)  a reconciliation of the defined benefit obligation from the beginning to the end of the year. 
E)  changes to reserves and other comprehensive income if any. 
A)  a reconciliation of relevant pension amounts. 
B)  amount of pension expense for the period, broken down by component. 
C)  the number of employees. 
D)  a reconciliation of the defined benefit obligation from the beginning to the end of the year. 
E)  changes to reserves and other comprehensive income if any.

Question 3

Usually,the amount of funding by an employer will exceed the benefits to be paid out to employees.

Accepted Answer

A) True 
 B)False

Question 4

The accumulated benefit and projected unit credit methods both result in increasing employer contributions to the pension plan over time.

Accepted Answer

A) True 
 B)False

Question 5

Today is John's 57th birthday and he has served 14 years for his firm.John is expected to retire on his 65th birthday.His firm expects to incur $5,000 of annual net health care claims costs for John beginning one year after his retirement date and continuing each year for a total of seven years (assume seven end of year payments in all).To be fully eligible for these benefits,John must work 20 years.Compute expected post-retirement benefit obligation for John today if the discount rate is 8%.

Accepted Answer

A)  $15,244 
B)  $12,322 
C)  $18,916 
D)  $14,064 
A)  $15,244 
B)  $12,322 
C)  $18,916 
D)  $14,064

Question 6

Jamieson Corp.sponsors a defined benefit plan for its employee group. The following data pertains to the plan's first 2 years in existence:   Jamieson's balance sheet as per IFRS for Year 2 would show a net:

Accepted Answer

A)  defined pension asset of $26,576. 
B)  defined pension liability of $26,576. 
C)  defined pension asset of $48,876. 
D)  defined pension liability of $48,876. 
A)  defined pension asset of $26,576. 
B)  defined pension liability of $26,576. 
C)  defined pension asset of $48,876. 
D)  defined pension liability of $48,876.

Question 7

Post-retirement benefits other than pensions must now be accounted for in a manner similar the way pensions are accounted for.

Accepted Answer

A) True 
 B)False

Question 8

Choose the most complete description of the possible relationship(s)between the discount rate (D)and the expected long-term rate of return on plan assets (R)used for defined benefit pension plans.

Accepted Answer

A) D > R B) D < R C) D = R D) D can be equal to, greater than, or less than R for any given firm A) D > R B) D < R C) D = R D) D can be equal to, greater than, or less than R for any given firm

Question 9

Pension plans are normally registered with the pension commissioner in the province of jurisdiction.

Accepted Answer

A) True 
 B)False

Question 10

In accounting for pension costs,any difference between current year's pension expense and contribution into the pension trust should be reported as a(n):

Accepted Answer

A)  offset to pension plan assets. 
B)  accrued actuarial liability. 
C)  deferred pension liability/cost. 
D)  operating expense of the current period. 
A)  offset to pension plan assets. 
B)  accrued actuarial liability. 
C)  deferred pension liability/cost. 
D)  operating expense of the current period.

Question 11

Jamieson Corp.sponsors a defined benefit plan for its employee group. The following data pertains to the plan's first 2 years in existence:   The funded status of Jamieson's defined benefit plan as at December 31st,Year 2 is:

Accepted Answer

A)  $26,576 overfunded. 
B)  $26,576 underfunded. 
C)  $48,876 underfunded. 
D)  $48,876 overfunded. 
A)  $26,576 overfunded. 
B)  $26,576 underfunded. 
C)  $48,876 underfunded. 
D)  $48,876 overfunded.

Question 12

Jamieson Corp.sponsors a defined benefit plan for its employee group. The following data pertains to the plan's first 2 years in existence:   Jamieson's defined benefit obligation as at December 31st,Year 2 would be:

Accepted Answer

A)  $50,526. 
B)  $46,526. 
C)  $54,526. 
D)  $58,526. 
A)  $50,526. 
B)  $46,526. 
C)  $54,526. 
D)  $58,526.

Question 13

JTD began working for XYZ at age 45 and immediately qualified for the company pension plan.The retirement age in the company is 65 (i.e.,20 full years of employment for JTD).The pension specifies a $30,000 annual (year-end)pension benefit for JTD and the life expectancy is age 80 (i.e.,the pension benefit will be paid for 15 years).Assume a constant 8% interest rate during the 20 working years,and a 7% constant rate during the retirement years per the actuarial estimates (assume all cash flows at year-end).XYZ plans to fund a constant amount per period at each year-end during the employment period.
Required:
(a)What amount of funds should be in the pension fund at the beginning of the first retirement year?
(b)What amount should XYZ pay to the funding agency each year-end during the employment period?
(c)Is it possible to determine pension expense for the first year of the plan?

Accepted Answer

(a)$30,000 *(PVA,7%,15)(9.10791)= $273,2

Question 14

When a pension plan is not trusteed,a company must report its pension plan assets and accrued pension liability on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 15

In the long run,the projected unit credit,accumulated benefit,and level contribution methods all provide the same funding.

Accepted Answer

A) True 
 B)False

Question 16

The balance of pension plan assets at fair value,as of any measurement date,reflects the cumulative: (Choose from the four Choices provided below)

Accepted Answer

A)  Choice 1 
B)  Choice 2 
C)  Choice 3 
D)  Choice 4 
A)  Choice 1 
B)  Choice 2 
C)  Choice 3 
D)  Choice 4

Question 17

Jamieson Corp.sponsors a defined benefit plan for its employee group. The following data pertains to the plan's first 2 years in existence:   Jamieson's pension expense as per ASPE for Year 1 would be:

Accepted Answer

A)  $41,400. 
B)  $44,700. 
C)  $46,800. 
D)  $40,600. 
A)  $41,400. 
B)  $44,700. 
C)  $46,800. 
D)  $40,600.

Question 18

Timu joined the firm 12 years ago and is 42 today.The firm has a post-retirement health care plan with the following coverages for retirees:   Timu is expected to retire at age 63.The present value today of 100% post-retirement health care coverage for Timu is $20,000,considering life expectancy and other factors.The present value of 75% coverage is $14,000.What is the accumulated post-retirement benefit obligation for Timu today?

Accepted Answer

A)  $20,000 
B)  $14,000 
C)  $8,000 
D)  $5,600 
A)  $20,000 
B)  $14,000 
C)  $8,000 
D)  $5,600

Question 19

Pension related estimates (not funding data)are provided by the:

Accepted Answer

A)  employer company. 
B)  independent actuary. 
C)  pension fund trustee. 
D)  employee union. 
A)  employer company. 
B)  independent actuary. 
C)  pension fund trustee. 
D)  employee union.

Question 20

Under the simplified approach to accounting for defined benefit pension plans under ASPE,all past service costs and unrecognized actuarial gains and losses must all flow through pension expense immediately.

Accepted Answer

A) True 
 B)False

Choose the correct statement concerning pensions (defined benefit)and other post-employment benefits.

All of the following are relevant policy disclosures suggested by the AcSB except:

Usually,the amount of funding by an employer will exceed the benefits to be paid out to employees.

The accumulated benefit and projected unit credit methods both result in increasing employer contributions to the pension plan over time.

Jamieson Corp.sponsors a defined benefit plan for its employee group. The following data pertains to the plan's first 2 years in existence: Jamieson's balance sheet as per IFRS for Year 2 would show a net:

Post-retirement benefits other than pensions must now be accounted for in a manner similar the way pensions are accounted for.

Choose the most complete description of the possible relationship(s)between the discount rate (D)and the expected long-term rate of return on plan assets (R)used for defined benefit pension plans.

Pension plans are normally registered with the pension commissioner in the province of jurisdiction.

In accounting for pension costs,any difference between current year's pension expense and contribution into the pension trust should be reported as a(n):

Jamieson Corp.sponsors a defined benefit plan for its employee group. The following data pertains to the plan's first 2 years in existence: The funded status of Jamieson's defined benefit plan as at December 31^st,Year 2 is:

Jamieson Corp.sponsors a defined benefit plan for its employee group. The following data pertains to the plan's first 2 years in existence: Jamieson's defined benefit obligation as at December 31^st,Year 2 would be:

When a pension plan is not trusteed,a company must report its pension plan assets and accrued pension liability on the balance sheet.

In the long run,the projected unit credit,accumulated benefit,and level contribution methods all provide the same funding.

The balance of pension plan assets at fair value,as of any measurement date,reflects the cumulative: (Choose from the four Choices provided below)

Jamieson Corp.sponsors a defined benefit plan for its employee group. The following data pertains to the plan's first 2 years in existence: Jamieson's pension expense as per ASPE for Year 1 would be:

Pension related estimates (not funding data)are provided by the:

Under the simplified approach to accounting for defined benefit pension plans under ASPE,all past service costs and unrecognized actuarial gains and losses must all flow through pension expense immediately.

The Framework for Financial Reporting

Accounting Judgements

Statements of Income and Comprehensive Income

Statements of Financial Position and Changes in Equity; Disclosure Notes

The Statement of Cash Flows

Revenue Recognition

Financial Assets: Cash and Receivables

Long-Lived Assets

Depreciation, Amortization, and Impairment

Financial Instruments: Investments in Bonds and Equity Securities

Filters

Exam 8: Cost-Based Inventories and Cost of Sales

Choose the correct statement concerning pensions (defined benefit)and other post-employment benefits.

All of the following are relevant policy disclosures suggested by the AcSB except:

Usually,the amount of funding by an employer will exceed the benefits to be paid out to employees.

The accumulated benefit and projected unit credit methods both result in increasing employer contributions to the pension plan over time.

Jamieson Corp.sponsors a defined benefit plan for its employee group. The following data pertains to the plan's first 2 years in existence: Jamieson's balance sheet as per IFRS for Year 2 would show a net:

Post-retirement benefits other than pensions must now be accounted for in a manner similar the way pensions are accounted for.

Choose the most complete description of the possible relationship(s)between the discount rate (D)and the expected long-term rate of return on plan assets (R)used for defined benefit pension plans.

Pension plans are normally registered with the pension commissioner in the province of jurisdiction.

In accounting for pension costs,any difference between current year's pension expense and contribution into the pension trust should be reported as a(n):

Jamieson Corp.sponsors a defined benefit plan for its employee group. The following data pertains to the plan's first 2 years in existence: The funded status of Jamieson's defined benefit plan as at December 31st,Year 2 is:

Jamieson Corp.sponsors a defined benefit plan for its employee group. The following data pertains to the plan's first 2 years in existence: Jamieson's defined benefit obligation as at December 31st,Year 2 would be:

When a pension plan is not trusteed,a company must report its pension plan assets and accrued pension liability on the balance sheet.

In the long run,the projected unit credit,accumulated benefit,and level contribution methods all provide the same funding.

The balance of pension plan assets at fair value,as of any measurement date,reflects the cumulative: (Choose from the four Choices provided below)

Jamieson Corp.sponsors a defined benefit plan for its employee group. The following data pertains to the plan's first 2 years in existence: Jamieson's pension expense as per ASPE for Year 1 would be:

Pension related estimates (not funding data)are provided by the:

Under the simplified approach to accounting for defined benefit pension plans under ASPE,all past service costs and unrecognized actuarial gains and losses must all flow through pension expense immediately.

The Framework for Financial Reporting

Accounting Judgements

Statements of Income and Comprehensive Income

Statements of Financial Position and Changes in Equity; Disclosure Notes

The Statement of Cash Flows

Revenue Recognition

Financial Assets: Cash and Receivables

Long-Lived Assets

Depreciation, Amortization, and Impairment

Financial Instruments: Investments in Bonds and Equity Securities

Filters

Jamieson Corp.sponsors a defined benefit plan for its employee group. The following data pertains to the plan's first 2 years in existence: The funded status of Jamieson's defined benefit plan as at December 31^st,Year 2 is:

Jamieson Corp.sponsors a defined benefit plan for its employee group. The following data pertains to the plan's first 2 years in existence: Jamieson's defined benefit obligation as at December 31^st,Year 2 would be: