Question 1

The vested benefits of an employee in a pension plan represent benefits

Accepted Answer

A) to be paid to the retired employee in the current year. 
B) to be paid to the retired employee in subsequent years. 
C) to be paid from funds currently in the hands of an independent trustee. 
D) that are not contingent on the employee's continuing in the service of the employer. 
A) to be paid to the retired employee in the current year. 
B) to be paid to the retired employee in subsequent years. 
C) to be paid from funds currently in the hands of an independent trustee. 
D) that are not contingent on the employee's continuing in the service of the employer.

Question 2

Which of the following accounting principles best describes the rationale for reporting a liability for earned but unused compensated absences?

Accepted Answer

A) Historical cost 
B) Full disclosure 
C) Materiality 
D) Matching 
A) Historical cost 
B) Full disclosure 
C) Materiality 
D) Matching

Question 3

Shutters Company adopted a defined benefit pension plan on January 1,2014.Shutters amortizes the prior service cost over 16 years and funds prior service cost by making equal payments to the fund trustee at the end of each of the first ten years.The service cost is fully funded at the end of each year.The following data are available for 2014:
 
If interest cost for 2014 is equal to the return on plan assets,then Shutters's prepaid pension cost at December 31,2014,is

Accepted Answer

A) $228,800. 
B) $166,800. 
C) $62,000. 
D) $0 
A) $228,800. 
B) $166,800. 
C) $62,000. 
D) $0

Question 4

Which of the following represents the best description of the projected benefit obligation at any balance sheet date?

Accepted Answer

A) Service cost to date + interest cost to date + unrecognized gain or loss at the balance sheet date 
B) Service cost to date + prior service cost to date + unrecognized gain or loss at the balance sheet date 
C) Service cost to date + interest cost to date - amortized prior service cost - actual return - benefits paid to date 
D) Service cost to date + interest cost + net total actuarial gain or loss + prior service cost to date - benefits paid to date 
A) Service cost to date + interest cost to date + unrecognized gain or loss at the balance sheet date 
B) Service cost to date + prior service cost to date + unrecognized gain or loss at the balance sheet date 
C) Service cost to date + interest cost to date - amortized prior service cost - actual return - benefits paid to date 
D) Service cost to date + interest cost + net total actuarial gain or loss + prior service cost to date - benefits paid to date

Question 5

Which of the following statements is correct?

Accepted Answer

A) Minimum (corridor) amortization of net unrecognized gain or loss is not allowed for postretirement benefit plans. 
B) Immediate recognition of gains and losses is allowed for postretirement benefit plans but not for pension plans. 
C) Immediate recognition of gains and losses is allowed for pension plans but not for postretirement benefit plans. 
D) Minimum (corridor) amortization of net unrecognized gain or loss is the only amortization method allowed for postretirement benefit plans. 
A) Minimum (corridor) amortization of net unrecognized gain or loss is not allowed for postretirement benefit plans. 
B) Immediate recognition of gains and losses is allowed for postretirement benefit plans but not for pension plans. 
C) Immediate recognition of gains and losses is allowed for pension plans but not for postretirement benefit plans. 
D) Minimum (corridor) amortization of net unrecognized gain or loss is the only amortization method allowed for postretirement benefit plans.

Question 6

Paltry Corporation has a pension plan that has a provision that employees will receive benefits upon retirement even though the employees are not working for the company at the time of retirement.Such a plan is characterized as

Accepted Answer

A) defined benefit. 
B) defined contribution. 
C) noncontributory. 
D) vested. 
A) defined benefit. 
B) defined contribution. 
C) noncontributory. 
D) vested.

Question 7

The projected benefit obligation is the measure of pension obligation that

Accepted Answer

A) is the only allowable estimate for reporting the service cost component of pension expense. 
B) is not an allowable estimate for reporting the service cost component of pension expense for defined benefit plans. 
C) is one of several allowable estimates for reporting the service cost component of pension expense. 
D) can no longer be used under GAAP as an estimate for reporting the service cost component of pension expense 
A) is the only allowable estimate for reporting the service cost component of pension expense. 
B) is not an allowable estimate for reporting the service cost component of pension expense for defined benefit plans. 
C) is one of several allowable estimates for reporting the service cost component of pension expense. 
D) can no longer be used under GAAP as an estimate for reporting the service cost component of pension expense

Question 8

Gordon Inc.has a defined benefit plan for its employees.The following information relates to this plan:
 
There was no unrecognized prior service cost or unrecognized gains or losses.Gordon's net periodic pension cost for the year was

Accepted Answer

A) $968,000. 
B) $940,000. 
C) $900,000. 
D) $880,000. 
A) $968,000. 
B) $940,000. 
C) $900,000. 
D) $880,000.

Question 9

Winters,Inc.,pays its managers a bonus consisting of 7% of net income (income after deduction of both bonus and income taxes).The company's income tax rate is 20%.Income for the current year is $600,000.
How much bonus would be paid for the current year (rounded to whole dollars)?

Accepted Answer

A) $42,000 
B) $33,600 
C) $31,818 
D) $31,248 
A) $42,000 
B) $33,600 
C) $31,818 
D) $31,248

Question 10

Evasive Corporation pays its employees monthly. The following information is available for the January payroll:
   All employees' salaries are subject to the tax rates mentioned above for Evasive Corporation.
-Using the information above,what was Evasive's liability relative to the January payroll after the employees received and cashed their payroll checks?

Accepted Answer

A) $28,800 
B) $23,760 
C) $21,600 
D) $21,200 
A) $28,800 
B) $23,760 
C) $21,600 
D) $21,200

Question 11

Which of the following payroll taxes are paid by the employer?

Accepted Answer

A) FICA taxes 
B) Federal unemployment taxes 
C) State unemployment taxes 
D) All of these 
A) FICA taxes 
B) Federal unemployment taxes 
C) State unemployment taxes 
D) All of these

Question 12

The interest cost component for other postretirement benefits is determined using

Accepted Answer

A) the settlement rate of interest. 
B) the rate of return on high quality fixed-income investments with cash flows matching the timing and amounts of expected benefit payments. 
C) both of these. 
D) neither of these. 
A) the settlement rate of interest. 
B) the rate of return on high quality fixed-income investments with cash flows matching the timing and amounts of expected benefit payments. 
C) both of these. 
D) neither of these.

Question 13

Which of the following is not a required note disclosure related to pension plans under FASB ASC Topic 715?

Accepted Answer

A) Fair value of plan assets 
B) Actuarial discount rate 
C) Projected benefit obligation 
D) Number of employees covered by the plan 
A) Fair value of plan assets 
B) Actuarial discount rate 
C) Projected benefit obligation 
D) Number of employees covered by the plan

Question 14

The amount of the expected return on plan assets is computed by multiplying the

Accepted Answer

A) beginning market-related value of the plan assets by the expected long-term rate of return on plan assets. 
B) ending market-related value of the plan assets by the expected long-term rate of return. 
C) average carrying value of the plan assets by the expected long-term rate of return on plan assets. 
D) beginning carrying value of the plan assets by the actuary's interest rate. 
A) beginning market-related value of the plan assets by the expected long-term rate of return on plan assets. 
B) ending market-related value of the plan assets by the expected long-term rate of return. 
C) average carrying value of the plan assets by the expected long-term rate of return on plan assets. 
D) beginning carrying value of the plan assets by the actuary's interest rate.

Question 15

Lincoln Corporation provides an incentive compensation plan under which its president is to receive a bonus equal to 15 percent of Lincoln's income in excess of $150,000 before deducting income tax but after deducting bonus.If income before income tax and bonus is $320,000 and the effective tax rate is 40 percent,the amount of the bonus should be

Accepted Answer

A) $22,174 
B) $24,174 
C) $34,000 
D) $46,000 
A) $22,174 
B) $24,174 
C) $34,000 
D) $46,000

Question 16

During the first week of February, Gabe Hopen earned $300. Assume that FICA taxes are 7.65 percent of wages up to $106,800, state unemployment tax is 5.0 percent of wages up to $13,000, and federal unemployment tax is 0.8 percent of wages up to $13,000. Assume that Gabe has voluntary withholdings of $10 (in addition to taxes) and that federal and state income tax withholdings are $18 and $6, respectively.
-Using the information above,what is the employer's payroll tax expense for the week,assuming that Gabe Hopen is the only employee?

Accepted Answer

A) $24.00 
B) $40.35 
C) $28.00 
D) $17.40 
A) $24.00 
B) $40.35 
C) $28.00 
D) $17.40

Question 17

Which of the following is not a post-employment benefit,according to FASB ASC Topic 712,"Employers' Accounting for Postemployment Benefits"?

Accepted Answer

A) Salary continuation after severance 
B) Health insurance paid for a three-month period following a layoff 
C) Life insurance coverage paid for retirees 
D) Job training for laid-off workers 
A) Salary continuation after severance 
B) Health insurance paid for a three-month period following a layoff 
C) Life insurance coverage paid for retirees 
D) Job training for laid-off workers

Question 18

FASB ASC Topic 715 requires that the notes accompanying the financial statements include a schedule reconciling the

Accepted Answer

A) funded status of the plan with amounts reported in the balance sheet. 
B) current period employer contributions with pension expense reported in the income statement. 
C) projected benefit obligation and the accumulated benefit obligation. 
D) actual return on plan assets with the expected return. 
A) funded status of the plan with amounts reported in the balance sheet. 
B) current period employer contributions with pension expense reported in the income statement. 
C) projected benefit obligation and the accumulated benefit obligation. 
D) actual return on plan assets with the expected return.

Question 19

The following information relates to the defined benefit pension plan for the Moldor Company for the year ending December 31, 2014.
  
-Using the information above,service cost for the year would be

Accepted Answer

A) $390,000. 
B) $129,000. 
C) $94,000. 
D) $59,000. 
A) $390,000. 
B) $129,000. 
C) $94,000. 
D) $59,000.

Question 20

Earthen Products,Inc.,has a noncontributory,defined-benefit pension plan.At December 31,2014,the end of the company's accounting period,the following pension-related data were available (000s):
   
Required:
1.Compute the 2014 net periodic pension expense.
2.Compute the 2014 funded status of the PBO.
3.Prepare the 2014 entry to record pension expense and funding.

Accepted Answer

The answer of Earthen Products,Inc.,has a noncontributory,defined-benefit pension plan.At December...

The vested benefits of an employee in a pension plan represent benefits

Which of the following accounting principles best describes the rationale for reporting a liability for earned but unused compensated absences?

Which of the following represents the best description of the projected benefit obligation at any balance sheet date?

Which of the following statements is correct?

Paltry Corporation has a pension plan that has a provision that employees will receive benefits upon retirement even though the employees are not working for the company at the time of retirement.Such a plan is characterized as

The projected benefit obligation is the measure of pension obligation that

Gordon Inc.has a defined benefit plan for its employees.The following information relates to this plan: There was no unrecognized prior service cost or unrecognized gains or losses.Gordon's net periodic pension cost for the year was

Winters,Inc.,pays its managers a bonus consisting of 7% of net income (income after deduction of both bonus and income taxes).The company's income tax rate is 20%.Income for the current year is $600,000. How much bonus would be paid for the current year (rounded to whole dollars)?

Which of the following payroll taxes are paid by the employer?

The interest cost component for other postretirement benefits is determined using

Which of the following is not a required note disclosure related to pension plans under FASB ASC Topic 715?

The amount of the expected return on plan assets is computed by multiplying the

Which of the following is not a post-employment benefit,according to FASB ASC Topic 712,"Employers' Accounting for Postemployment Benefits"?

FASB ASC Topic 715 requires that the notes accompanying the financial statements include a schedule reconciling the

The following information relates to the defined benefit pension plan for the Moldor Company for the year ending December 31, 2014. -Using the information above,service cost for the year would be

Financial Reporting

A Review of the Accounting Cycle

The Balance Sheet and Notes to the Financial Statements

The Income Statement

Statement of Cash Flows and Articulation

Earnings Management

The Revenuereceivablescash Cycle

Revenue Recognition

Inventory and Cost of Goods Sold

Investments in Noncurrent Operating Assets-Acquisition

Investments in Noncurrent Operating Assets-Utilization and Retirement

Debt Financing

Equity Financing

Investments in Debt and Equity Securities

Leases

Income Taxes

Earnings Per Share

Derivatives, contingencies, business Segments, and Interim Reports

Accounting Changes and Error Corrections

Statement of Cash Flows Revisited

Accounting in a Global Market

Analysis of Financial Statements

Filters

Exam 17: Employee Compensation-Payroll,pensions, Other Compissues

The vested benefits of an employee in a pension plan represent benefits

Which of the following accounting principles best describes the rationale for reporting a liability for earned but unused compensated absences?

Which of the following represents the best description of the projected benefit obligation at any balance sheet date?

Which of the following statements is correct?

Paltry Corporation has a pension plan that has a provision that employees will receive benefits upon retirement even though the employees are not working for the company at the time of retirement.Such a plan is characterized as

The projected benefit obligation is the measure of pension obligation that

Gordon Inc.has a defined benefit plan for its employees.The following information relates to this plan: There was no unrecognized prior service cost or unrecognized gains or losses.Gordon's net periodic pension cost for the year was

Winters,Inc.,pays its managers a bonus consisting of 7% of net income (income after deduction of both bonus and income taxes).The company's income tax rate is 20%.Income for the current year is $600,000. How much bonus would be paid for the current year (rounded to whole dollars)?

Which of the following payroll taxes are paid by the employer?

The interest cost component for other postretirement benefits is determined using

Which of the following is not a required note disclosure related to pension plans under FASB ASC Topic 715?

The amount of the expected return on plan assets is computed by multiplying the

Which of the following is not a post-employment benefit,according to FASB ASC Topic 712,"Employers' Accounting for Postemployment Benefits"?

FASB ASC Topic 715 requires that the notes accompanying the financial statements include a schedule reconciling the

The following information relates to the defined benefit pension plan for the Moldor Company for the year ending December 31, 2014. -Using the information above,service cost for the year would be

Financial Reporting

A Review of the Accounting Cycle

The Balance Sheet and Notes to the Financial Statements

The Income Statement

Statement of Cash Flows and Articulation

Earnings Management

The Revenuereceivablescash Cycle

Revenue Recognition

Inventory and Cost of Goods Sold

Investments in Noncurrent Operating Assets-Acquisition

Investments in Noncurrent Operating Assets-Utilization and Retirement

Debt Financing

Equity Financing

Investments in Debt and Equity Securities

Leases

Income Taxes

Earnings Per Share

Derivatives, contingencies, business Segments, and Interim Reports

Accounting Changes and Error Corrections

Statement of Cash Flows Revisited

Accounting in a Global Market

Analysis of Financial Statements

Filters