1.

Which of the following is not usually part of the pension formula under a
defined benefit plan?
Compensation level.
Number of years of service.
Seniority at time of retirement.
Age at retirement.
2. Data for 2016 were as follows: PBO, January 1, $249,000 and December 31,
$279,000; pension plan assets (fair value) January 1, $188,000, and
December 31, $235,000. The projected benefit obligation was underfunded at
the end of 2016 by:
$61,000.
$44,000.
$30,000.
$47,000.
3. The employer has an obligation to provide future benefits for:
Defined contribution pension plans.
Defined benefit and defined contribution plans.
Defined benefit pension plans.
None of these answer choices are correct.
4. The accounting for defined contribution pension plans is easy because each
year:
The employer records pension expense equal to the annual contribution.
The employer records pension expense based on the earnings of the plan
assets.
The employer records pension expense based on an amount provided by the
actuary.
The employer records pension expense equal to the amount paid out to
retirees.
5. Which of the following describes defined benefit pension plans?
Retirement benefits depend on how much money has accumulated in an
individual's account.
Retirement benefits are based on the plan benefit formula.
They raise few accounting issues for employers.

They are simple to construct.