Question 1

An increase in the present value of a defined benefit obligation resulting from employee service in the current period is referred to as:

Accepted Answer

A)  the current service cost 
B)  the past service cost 
C)  the interest cost 
D)  an actuarial gain or loss 
A)  the current service cost 
B)  the past service cost 
C)  the interest cost 
D)  an actuarial gain or loss A

Question 2

Benefits paid to members of a defined contribution post-employment fund are based on:
I$\quad$ the level of contributions made to the fund 
II $\quad$remuneration levels while employed
III $\quad$number of year's service
IV $\quad$investment returns generated by the fund

Accepted Answer

A)  I and II only 
B)  II and III only 
C)  III and IV only 
D)  I and IV only 
A)  I and II only 
B)  II and III only 
C)  III and IV only 
D)  I and IV only D

Question 3

Which of the following obligations do NOT arise from past services provided by an employee?

Accepted Answer

A)  short-term compensated absences 
B)  termination benefits 
C)  other long-term employee benefits 
D)  post-employment benefits 
A)  short-term compensated absences 
B)  termination benefits 
C)  other long-term employee benefits 
D)  post-employment benefits B

Question 4

AASB 119 defines employee benefits as:

Accepted Answer

A)  any cash consideration given by an entity to employees or their authorised representatives in exchange for services rendered by the employee 
B)  all forms of consideration given by an entity to employees or their authorised representatives in exchange for services rendered by the employee 
C)  all forms of consideration given by an entity in exchange for service rendered by employees 
D)  all forms of consideration given by an entity to employees or their authorised representatives 
A)  any cash consideration given by an entity to employees or their authorised representatives in exchange for services rendered by the employee 
B)  all forms of consideration given by an entity to employees or their authorised representatives in exchange for services rendered by the employee 
C)  all forms of consideration given by an entity in exchange for service rendered by employees 
D)  all forms of consideration given by an entity to employees or their authorised representatives

Question 5

Determining an entity's liability for long service leave requires estimation of:

Accepted Answer

A)  when the leave will be taken 
B)  projected salary levels 
C)  proportion of employees who will become entitled to the leave 
D)  all of the above. 
A)  when the leave will be taken 
B)  projected salary levels 
C)  proportion of employees who will become entitled to the leave 
D)  all of the above.

Question 6

Which of the following types of employee benefits are required to be measured at their nominal value?

Accepted Answer

A)  long service leave 
B)  defined benefit post-employment benefits 
C)  accumulating non-vesting sick leave 
D)  defined contribution employment benefits 
A)  long service leave 
B)  defined benefit post-employment benefits 
C)  accumulating non-vesting sick leave 
D)  defined contribution employment benefits

Question 7

If the amount paid to the defined contribution fund by an entity during the year is less than the amount payable in relation to service provided by employees, the entity must recognise;

Accepted Answer

A)  an asset for the unpaid contributions 
B)  a liability for the unpaid contributions 
C)  an expense for the unpaid contributions 
D)  a gain for the unpaid contributions 
A)  an asset for the unpaid contributions 
B)  a liability for the unpaid contributions 
C)  an expense for the unpaid contributions 
D)  a gain for the unpaid contributions

Question 8

The nominal value of an accumulated benefit for long service leave is calculated as (Years of employment/Years required for LSL) x (weeks of paid leave/52) x ………..?

Accepted Answer

A)  current salaries 
B)  projected salaries x (1+inflation rate)n 
C)  current salaries / (1+inflation rate)n 
D)  projected salaries 
A)  current salaries 
B)  projected salaries x (1+inflation rate)n 
C)  current salaries / (1+inflation rate)n 
D)  projected salaries

Question 9

An entity is able to record a provision for termination benefits when it:

Accepted Answer

A)  has a detailed formal plan 
B)  has a definite intention of terminating employment 
C)  has received Board approval for the termination benefits 
D)  can no longer withdraw the offer of the benefits 
A)  has a detailed formal plan 
B)  has a definite intention of terminating employment 
C)  has received Board approval for the termination benefits 
D)  can no longer withdraw the offer of the benefits

Question 10

Pirate Ltd employs 5 staff. Each staff member is entitled to 20 days annual leave per annum. Leave loading of 17.5% is paid when the leave is taken. At 1 July 2013 the balance in the provision for annual leave account was $20 303.
Details of each employees leave entitlement at 30 June 2014 are as follows:
$\begin{array}{|l|l|l|l|}
\hline \text { Employee } & \text { Salary } & \begin{array}{l}
\text { Days owing @ } \
1 / 7 / 13
\end{array} & \begin{array}{l}
\text { Days taken } \
\text { during year }
\end{array} \
\hline \text { Jo Bird } & \$ 65000 & 17 & 22 \
\hline \text { Bill Brown } & \$ 70000 & 5 & 12 \
\hline \text { Ben Fit } & \$ 85000 & 24 & 18 \
\hline \text { Greg Horn } & \$ 62500 & 3 & 15 \
\hline \text { Lou Hamilton } & \$ 90000 & 9 & 26 \
\hline
\end{array}$
There are 260 work days in a year. On 1 July each year all employees receive a 5% wage rise. There are no other wage rises given during the year.
-
Annual leave payments made during the year were debited against the provision account. The total debit against the annual leave account during the year in relation to leave taken was:

Accepted Answer

A)  $27 221 
B)  $28 654 
C)  $33 585 
D)  $33 668 
A)  $27 221 
B)  $28 654 
C)  $33 585 
D)  $33 668

Question 11

Benefits paid to members of a defined benefit post-employment fund are based on:
I the level of employer contributions made to the fund
II remuneration levels while employed
III number of years service
IV investment returns generated by the fund

Accepted Answer

A)  I and II only 
B)  II and III only 
C)  III and IV only 
D)  I and IV only 
A)  I and II only 
B)  II and III only 
C)  III and IV only 
D)  I and IV only

Question 12

AASB 119 adopts which method to determining long service leave obligations?

Accepted Answer

A)  units of production method 
B)  the actuarial method 
C)  the bi-nominal method 
D)  projected unit credit method 
A)  units of production method 
B)  the actuarial method 
C)  the bi-nominal method 
D)  projected unit credit method

Question 13

AASB 119 does NOT prescribe the accounting treatment for:

Accepted Answer

A)  contributions to defined contribution post-employment benefit funds 
B)  contributions received by a defined contribution post-employment benefit fund 
C)  assets arising from defined benefit post-employment benefit plans from the perspective of the employer 
D)  liabilities arising from defined benefit post-employment benefit plans from the perspective of the employer 
A)  contributions to defined contribution post-employment benefit funds 
B)  contributions received by a defined contribution post-employment benefit fund 
C)  assets arising from defined benefit post-employment benefit plans from the perspective of the employer 
D)  liabilities arising from defined benefit post-employment benefit plans from the perspective of the employer

Question 14

Which if the following is NOT an example of a short-term employee benefit?

Accepted Answer

A)  wages and salaries 
B)  termination payments 
C)  bonuses and profit-sharing arrangements 
D)  short-term compensated benefits 
A)  wages and salaries 
B)  termination payments 
C)  bonuses and profit-sharing arrangements 
D)  short-term compensated benefits

Question 15

AASB 119 requires short-term employee benefits to be measured at:

Accepted Answer

A)  future value 
B)  nominal value 
C)  present value 
D)  fair value 
A)  future value 
B)  nominal value 
C)  present value 
D)  fair value

Question 16

Employee benefits can be allocated to assets:

Accepted Answer

A)  only if it relates to the cost of an internally generated intangible 
B)  where the entity is certain the future economic benefits will flow to it 
C)  in accordance with the requirements of other accounting standards 
D)  where they meet the definition of an asset under the Conceptual Framework 
A)  only if it relates to the cost of an internally generated intangible 
B)  where the entity is certain the future economic benefits will flow to it 
C)  in accordance with the requirements of other accounting standards 
D)  where they meet the definition of an asset under the Conceptual Framework

Question 17

AASB 119 requires an entity to record a liability for long service leave:

Accepted Answer

A)  once the employee becomes presently entitled to the leave 
B)  as the employee provides service to the entity 
C)  when the leave is taken by the employee 
D)  in a consistent manner from year to year 
A)  once the employee becomes presently entitled to the leave 
B)  as the employee provides service to the entity 
C)  when the leave is taken by the employee 
D)  in a consistent manner from year to year

Question 18

Actuarial gains or losses can arise from:
I $\quad$employee service provided in the current period 
II $\quad$the unwinding of the discount applied to the obligation 
III $\quad$changes to actuarial assumptions
IV $\quad$experience adjustments

Accepted Answer

A)  I and II 
B)  II and III 
C)  III and IV 
D)  I and IV 
A)  I and II 
B)  II and III 
C)  III and IV 
D)  I and IV

Question 19

The key steps involved in accounting by the employer for a defined benefit post-employment fund in accordance with AASB 119 include:

Accepted Answer

A)  determining the deficit or surplus of the fund 
B)  determining the amount of the net defined benefit liability (asset) 
C)  determining the amounts to be recognised in profit or loss for current service cost, any past service cost and net interest expense (income) on the net defined benefit liability (asset) 
D)  all of the options are correct 
A)  determining the deficit or surplus of the fund 
B)  determining the amount of the net defined benefit liability (asset) 
C)  determining the amounts to be recognised in profit or loss for current service cost, any past service cost and net interest expense (income) on the net defined benefit liability (asset) 
D)  all of the options are correct

Question 20

Salary sacrificing refers to:

Accepted Answer

A)  an employer withholding a portion of an employee's salary or wages for sub-standard performance 
B)  an employee not receiving a portion of their salary and wages due to the fact that pre-determined performance targets have not been met 
C)  an employee foregoing some of their salary because leave entitlements such as sick leave have been exceeded 
D)  an employee electing to forego some of their salary or wages in return for other non-cash benefits 
A)  an employer withholding a portion of an employee's salary or wages for sub-standard performance 
B)  an employee not receiving a portion of their salary and wages due to the fact that pre-determined performance targets have not been met 
C)  an employee foregoing some of their salary because leave entitlements such as sick leave have been exceeded 
D)  an employee electing to forego some of their salary or wages in return for other non-cash benefits

Exam 11: Employee Benefits

An increase in the present value of a defined benefit obligation resulting from employee service in the current period is referred to as:

Benefits paid to members of a defined contribution post-employment fund are based on: I \quad the level of contributions made to the fund II \quad remuneration levels while employed III \quad number of year's service IV \quad investment returns generated by the fund

Which of the following obligations do NOT arise from past services provided by an employee?

AASB 119 defines employee benefits as:

Determining an entity's liability for long service leave requires estimation of:

Which of the following types of employee benefits are required to be measured at their nominal value?

If the amount paid to the defined contribution fund by an entity during the year is less than the amount payable in relation to service provided by employees, the entity must recognise;

The nominal value of an accumulated benefit for long service leave is calculated as (Years of employment/Years required for LSL) x (weeks of paid leave/52) x ………..?

An entity is able to record a provision for termination benefits when it:

Benefits paid to members of a defined benefit post-employment fund are based on: I the level of employer contributions made to the fund II remuneration levels while employed III number of years service IV investment returns generated by the fund

AASB 119 adopts which method to determining long service leave obligations?

AASB 119 does NOT prescribe the accounting treatment for:

Which if the following is NOT an example of a short-term employee benefit?

AASB 119 requires short-term employee benefits to be measured at:

Employee benefits can be allocated to assets:

AASB 119 requires an entity to record a liability for long service leave:

Actuarial gains or losses can arise from: I \quad employee service provided in the current period II \quad the unwinding of the discount applied to the obligation III \quad changes to actuarial assumptions IV \quad experience adjustments

The key steps involved in accounting by the employer for a defined benefit post-employment fund in accordance with AASB 119 include:

Salary sacrificing refers to:

Accounting Regulation and the Conceptual Framework

Application of Accounting Theory

Shareholders Equity: Share Capital and Reserves

Fair Value Measurement

Revenue

Provisions, Contingent Liabilities and Contingent Assets

Income Taxes

Financial Instruments

Share-Based Payments

Translation of the Financial Statements of Foreign Entities

Inventories

Property, Plant and Equipment

Leases

Understanding Australian Accounting Standards

Impairment of Assets

Accounting for Mineral Resources

Agriculture

Financial Statement Presentation

Statement of Cash Flows

Earnings Per Share

Operating Segments

Operating Segments

Business Combinations

Consolidation: Principles and Accounting Requirements

Consolidation: Intragroup Transactions

Consolidation: Non Controlling Interest

Joint Arrangements

Associates and Joint Ventures

Filters

Benefits paid to members of a defined contribution post-employment fund are based on: I $\quad$ the level of contributions made to the fund II $\quad$ remuneration levels while employed III $\quad$ number of year's service IV $\quad$ investment returns generated by the fund

Actuarial gains or losses can arise from: I $\quad$ employee service provided in the current period II $\quad$ the unwinding of the discount applied to the obligation III $\quad$ changes to actuarial assumptions IV $\quad$ experience adjustments