Which statement is true concerning the recognition and measurement of a defined

contribution plan?
The contribution shall be recognized as expense in the period it is payable.

Any excess contribution shall be recognized as prepaid expense but only to the extent that the
prepayment will lead to a reduction in future payments or a cash refund.

All of these statements are true about a defined contribution plan

Any unpaid contribution at the end of the period shall be recognized as accrued liability.

When an entity amends a pension plan, past service cost should be

Amortized over the remaining service period of employees.

Treated as a prior period adjustment because no future periods are benefited.

Reported as an expense in the period the plan is amended.

Recorded in other comprehensive income.

Which of the following should be included in plan assets?

Both assets held by a long-term employee benefit fund and qualifying insurance policy

Neither assets held by a long-term employee benefit fund nor qualifying insurance policy

Assets held by a long-term employee benefit fund

Qualifying insurance policy

Which statement characterizes defined benefit plan?

Retirement benefits are based on the plan's benefit formula.

The investment risk is borne by the employee.

Defined benefit plans are comparatively simple.

Retirement benefits depend on how well pension fund assets have been managed.

Which statement is incorrect concerning the recognition and measurement of a defined

benefit plan?

The defined benefit plan must be fully funded.

The obligation is measured on a discounted basis.

Actuarial assumptions are required to measure the obligation and expense and there is a
possibility of actuarial gains and losses.
The expense recognized for a defined benefit plan is not necessarily the amount of contribution
due for the period.

In a benefit plan, the process of funding refers to

Making the periodic contributions to a funding agency to ensure that funds are available to meet
claims.

Determining the defined benefit obligation.

Determining the accumulated benefit obligation.

Determining the amount reported for pension expense.

Which statement characterizes defined contribution plan?

The investment risk is borne by the employer.

Contributions are made in equal amounts by employer and employees.

Defined contribution plans are more complex than defined benefit plans.

The employer's obligation is satisfied by making the appropriate amount of periodic contribution.

The formula in a defined benefit plan

Defines the benefits that the employee will receive at the time of retirement.

Defines the contribution to be made by the employer and no promise is made concerning the
ultimate benefits to be paid out to the employees.

Requires that the benefit of gain or the risk of loss from the assets contributed to the plan should
be borne by the employee.

Requires that the defined benefit cost and funding must the same.

A formula in a defined contribution plan

Requires an employer to contribute a certain sum each period based on the formula.

Ensures that enough fund would be available.

Defines the benefits that the employee will receive at the time of retirement.

Ensures that the defined benefit cost and funding are the same.

Which is not a characteristic of defined contribution plan?

The accounting for a defined contribution plan is straightforward and uncomplicated.

The employer contribution each period is based on a formula.

The benefits to be received are usually determined by an employee's highest salary.

The benefit of gain or the risk of loss from the assets contributed to the plan is borne by the
employee.

Plan assets are assets held by a long-term benefit fund and must satisfy all of the following
conditions, except
The assets in the fund are available to pay only employee benefits.

The assets in the fund are not available to the reporting entity’s own creditors.

The assets are held by an entity, the fund itself, that is legally separate from the reporting entity.

The assets in the fund can be returned to the entity even if the remaining assets are insufficient
to meet all employee benefit obligations.

What is the meaning of net interest in relation to a defined benefit cost?

Interest income on the fair value of plan assets

Interest expense on defined benefit liability

Interest expense on defined benefit liability less applicable income tax

The difference between interest expense on defined benefit liability, interest expense on effect of
asset ceiling and interest income on plan assets

The return on plan assets

Is equal to the change in the fair value of the plan assets during the year.

Is equal to the discount rate times the fair value of the plan assets at the beginning of the period.

Is equal to the expected rate of return times the fair value of plan assets at the beginning of the
period.

Includes interest, dividends and change in the fair value of the plan assets during the year.

In rare circumstances, when a retirement benefit plan has attributes of both defined
contribution and defined benefit plan, the plan is deemed

Defined contribution plan

Both defined benefit and defined contribution plan

Defined benefit plan

Neither defined benefit nor defined contribution plan

In accounting for a defined benefit plan

The expense recognized each period is equal to the cash contribution to the plan.

The liability is determined based upon variables that reflect current salary levels.
An appropriate funding must be established to ensure that enough fund would be available at
retirement.

The employer responsibility is simply to make a contribution each year.