Question 1

The accumulated benefit obligation reflects only current salary levels.

Accepted Answer

A) True 
 B)False

Question 2

Refer to Walker Corporation.Assuming that all compensation expense has been recorded,record the journal entry to reflect the expiration of 3,000 options that were never exercised.

Accepted Answer

The answer of Refer to Walker Corporation.Assuming that all compensation...

Question 3

Prior service cost is recognized as pension expense over a period of several years under IFRS.

Accepted Answer

A) True 
 B)False

Question 4

What is the most important accounting objective for equity classified awards?

Accepted Answer

A) Measuring their fair value for balance sheet purposes. 
B) Determining the correct amount of compensation expense during the service period. 
C) Disclosing increases and decreases in the value of the stock options held at the end of each accounting period. 
D) Determining the change in the number of stock options that will eventually be exercised. 
A) Measuring their fair value for balance sheet purposes. 
B) Determining the correct amount of compensation expense during the service period. 
C) Disclosing increases and decreases in the value of the stock options held at the end of each accounting period. 
D) Determining the change in the number of stock options that will eventually be exercised.

Question 5

In what ways must an accountant exercise judgment in relation to stock-based compensation plans?

Accepted Answer

Accountants make two important judgments

Question 6

Which of the following statements about pension plan disclosures is true?

Accepted Answer

A) The difference between the projected benefit obligation and the plan assets at fair value represents the unfunded status of the plan reported on the balance sheet. 
B) The footnote must provide information about the amortized net actuarial gain or loss. 
C) The footnote must disclose assumptions used for discount rates and expected return on assets on an weighted average basis. 
D) Nonpublic entities must separately disclose the components of net pension benefit cost. 
A) The difference between the projected benefit obligation and the plan assets at fair value represents the unfunded status of the plan reported on the balance sheet. 
B) The footnote must provide information about the amortized net actuarial gain or loss. 
C) The footnote must disclose assumptions used for discount rates and expected return on assets on an weighted average basis. 
D) Nonpublic entities must separately disclose the components of net pension benefit cost.

Question 7

On January 1,Year 1,Gallagher Corporation issued stock options for 300,000 shares to a division manager.The options have an estimated fair value of $6 each.These options are not exercisable unless division revenue increases by 8% in four years.Gallagher estimates that it is probable that the goal will be achieved.What is pretax compensation expense for year 1?

Accepted Answer

A) $0 
B) $450,000 
C) $600,000 
D) $1,800,000 
A) $0 
B) $450,000 
C) $600,000 
D) $1,800,000

Question 8

The fair value of stock options on the date of grant is usually readily determinable.

Accepted Answer

A) True 
 B)False

Question 9

Teague Corporation permits any of its employees to buy shares directly from the company through payroll deduction.There are no brokerage fees and shares can be purchased at a 10% discount.During July,employees purchased 15,000 shares at a time when the established market price was $25 per share.Teague will record compensation expense associated with July purchases of ________.

Accepted Answer

A) $0 
B) $37,500 
C) $318,750 
D) $375,000 
A) $0 
B) $37,500 
C) $318,750 
D) $375,000

Question 10

The vested benefit obligation uses future salary levels.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following areas is not an area that financial statements users seek to analyze in a company's defined benefit pension plan?

Accepted Answer

A) funded status 
B) actuarial gains and losses in other comprehensive income 
C) settlement rate and return on plan asset assumptions 
D) future payout assumptions. 
A) funded status 
B) actuarial gains and losses in other comprehensive income 
C) settlement rate and return on plan asset assumptions 
D) future payout assumptions.

Question 12

Pension data for John Ferguson Company include the following for the current calendar year:
Discount rate: 7%
Expected return on plan assets: 11%
Actual return on plan assets: 10%
Service cost: $250,000
January 1:
   December 31:
   Required:
1.Determine pension expense for the year.
   2.Prepare the journal entries to record pension expense and funding and distributions to employees for the year.

Accepted Answer

The answer of Pension data for John Ferguson Company include...

Question 13

When pension plan assets exceed pension plan obligations,the pension plan is overfunded.

Accepted Answer

A) True 
 B)False

Question 14

Nonpublic entities are not required to separately disclose the components of net periodic benefit cost.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is not a factor in calculating a defined benefit?

Accepted Answer

A) percentage of salary 
B) current salary level 
C) return on plan assets 
D) credits for years of service 
A) percentage of salary 
B) current salary level 
C) return on plan assets 
D) credits for years of service

Question 16

Which of the following is not an element of pension cost that must be disclosed?

Accepted Answer

A) actual return on plan assets 
B) service cost 
C) interest cost 
D) amortization of prior service cost 
A) actual return on plan assets 
B) service cost 
C) interest cost 
D) amortization of prior service cost

Question 17

When a pension plan is amended to recognize previous service of currently enrolled employees,what component of pension expense is created?

Accepted Answer

A) transition costs 
B) amendment costs 
C) past service costs 
D) prior service costs 
A) transition costs 
B) amendment costs 
C) past service costs 
D) prior service costs

Question 18

Which of the following is a characteristic of the projected benefit obligation measurement?

Accepted Answer

A) It considers only vested employees. 
B) It uses projected future salary levels. 
C) It is the smallest estimate of the projected benefit obligation. 
D) It considers only current employees. 
A) It considers only vested employees. 
B) It uses projected future salary levels. 
C) It is the smallest estimate of the projected benefit obligation. 
D) It considers only current employees.

Question 19

Which of the following items is not specified by a compensation arrangement?

Accepted Answer

A) number of options granted 
B) original stock price 
C) exercise price 
D) vesting period 
A) number of options granted 
B) original stock price 
C) exercise price 
D) vesting period

Question 20

Under a defined benefit pension plan,employees are responsible for losses on plan assets.

Accepted Answer

A) True 
 B)False

The accumulated benefit obligation reflects only current salary levels.

Refer to Walker Corporation.Assuming that all compensation expense has been recorded,record the journal entry to reflect the expiration of 3,000 options that were never exercised.

Prior service cost is recognized as pension expense over a period of several years under IFRS.

What is the most important accounting objective for equity classified awards?

In what ways must an accountant exercise judgment in relation to stock-based compensation plans?

Which of the following statements about pension plan disclosures is true?

The fair value of stock options on the date of grant is usually readily determinable.

The vested benefit obligation uses future salary levels.

Which of the following areas is not an area that financial statements users seek to analyze in a company's defined benefit pension plan?

When pension plan assets exceed pension plan obligations,the pension plan is overfunded.

Nonpublic entities are not required to separately disclose the components of net periodic benefit cost.

Which of the following is not a factor in calculating a defined benefit?

Which of the following is not an element of pension cost that must be disclosed?

When a pension plan is amended to recognize previous service of currently enrolled employees,what component of pension expense is created?

Which of the following is a characteristic of the projected benefit obligation measurement?

Which of the following items is not specified by a compensation arrangement?

Under a defined benefit pension plan,employees are responsible for losses on plan assets.

The Financial Reporting Environment

Financial Reporting Theory

Judgment and Applied Financial Accounting Research

Review of the Accounting Cycle

Statements of Net Income and Comprehensive Net Income

Statements of Financial Position and Cash Flows and the Annual Report

Accounting and the Time Value of Money

Revenue Recognition

OL: Revenue Recognition

Short-Term Operating Assets: Cash and Receivables

Short-Term Operating Assets: Inventory

Long-Term Operating Assets: Acquisition, cost Allocation, and Derecognition

Long-Term Operating Assets: Departures From Historical Cost

Operating Liabilities and Contingencies

OL: Operating Liabilities and Contingencies

Financing Liabilities

Accounting for Stockholders Equity

Investing Assets

Accounting for Income Taxes

Earnings Per Share

Accounting Corrections and Error Analysis

Filters

Exam 20: Accounting for Employee Compensation and Benefits

The accumulated benefit obligation reflects only current salary levels.

Refer to Walker Corporation.Assuming that all compensation expense has been recorded,record the journal entry to reflect the expiration of 3,000 options that were never exercised.

Prior service cost is recognized as pension expense over a period of several years under IFRS.

What is the most important accounting objective for equity classified awards?

In what ways must an accountant exercise judgment in relation to stock-based compensation plans?

Which of the following statements about pension plan disclosures is true?

The fair value of stock options on the date of grant is usually readily determinable.

The vested benefit obligation uses future salary levels.

Which of the following areas is not an area that financial statements users seek to analyze in a company's defined benefit pension plan?

When pension plan assets exceed pension plan obligations,the pension plan is overfunded.

Nonpublic entities are not required to separately disclose the components of net periodic benefit cost.

Which of the following is not a factor in calculating a defined benefit?

Which of the following is not an element of pension cost that must be disclosed?

When a pension plan is amended to recognize previous service of currently enrolled employees,what component of pension expense is created?

Which of the following is a characteristic of the projected benefit obligation measurement?

Which of the following items is not specified by a compensation arrangement?

Under a defined benefit pension plan,employees are responsible for losses on plan assets.

The Financial Reporting Environment

Financial Reporting Theory

Judgment and Applied Financial Accounting Research

Review of the Accounting Cycle

Statements of Net Income and Comprehensive Net Income

Statements of Financial Position and Cash Flows and the Annual Report

Accounting and the Time Value of Money

Revenue Recognition

OL: Revenue Recognition

Short-Term Operating Assets: Cash and Receivables

Short-Term Operating Assets: Inventory

Long-Term Operating Assets: Acquisition, cost Allocation, and Derecognition

Long-Term Operating Assets: Departures From Historical Cost

Operating Liabilities and Contingencies

OL: Operating Liabilities and Contingencies

Financing Liabilities

Accounting for Stockholders Equity

Investing Assets

Accounting for Income Taxes

Earnings Per Share

Accounting Corrections and Error Analysis

Filters