C. Advance rental receipts.
D. Fines and expenses resulting from a violation of law.
37) In accounting for a defined-benefit pension plan
A. the expense recognized each period is equal to the cash contributi
on.
B. the employer‟s responsibility is simply to make a contribution eac
h year based on the formula established in the plan.
C. an appropriate funding pattern must be established to ensure that
enough monies will be available at retirement to meet the benefits pro
mised.
D. the liability is determined based upon known variables that reflect
future salary levels promised to employees.
38) In a defined-benefit plan, the process of funding refers to
A. making the periodic contributions to a funding agency to ensure t
hat funds are available to meet retirees‟ claims.
B. determining the accumulated benefit obligation.
C. determining the projected benefit obligation.
D. determining the amount that might be reported for pension expens
e.
39) In a defined-contribution plan, a formula is used that
A. requires an employer to contribute a certain sum each period base
d on the formula.
B. ensures that pension expense and the cash funding amount will be
different.
C. defines the benefits that the employee will receive at the time of r
etirement.
D. ensures that employers are at risk to make sure funds are availabl
e at retirement.
40) The accumulated benefit obligation measures
A. an estimated total benefit at retirement and then computes the lev
el cost that will be sufficient, together with interest expected to accum
ulate at the assumed rate, to provide the total benefits at retirement.
B. the pension obligation on the basis of the plan formula applied to
years of service to date and based on future salary levels.
C. the pension obligation on the basis of the plan formula applied to
years of service to date and based on existing salary levels.