Chapter 26

1. When an entity pays insurance premiums to fund a post employment benefit

plan and the entity has no legal or constructive obligation on the policy, the
post employment benefit plan shall be treated as Defined contribution plan

2. In a defined contribution plan, a formula is used that Requires an employer to

contribute a certain sum each period based on the formula

3. The components of defined benefit cost include all, except Contribution to

the plan

4. What is the meaning of "net interest" in relation to a defined benefit cost? The
difference between interest expense on defined benefit liability and
interest income on the fair value of plan assets

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

6. It is the increase in the present value of the defined benefit obligation for
employee service in prior periods, resulting from a plan amendment or
curtailment. Past service cost

7. These are compensated absences that are carried forward and can be used in
future periods and the employees are entitled to a cash payment for unused
entitlement on leaving the entity Accumulating and vesting

8. Which statement best describes “other long-term employee benefits”?

Benefits that are not expected to be settled within twelve months after the
end of the reporting period.

9. Employees are each entitled to 20 days of paid holiday leave per year. Unused
holiday leave cannot be carried forward and does not vest. What is the holiday
leave? A short-term employee benefit

10.What are compensated absence? paid time off

11.It is a benefit plan under which an entity pays a fixed contribution into a separate
fund and will have no legal or constructive obligation to pay further contribution if the
fund becomes insufficient to pay employee benefits. Defined contribution plan

12. Postemployment employee benefits include all of the following, except Long-
term disability benefits

13.A profit-sharing plan requires an entity to pay a specified proportion of the

cumulative profit for a five-year period to employees who serve throughout the five-
year period. What is the profit-sharing plan? Other long-term employee benefit

14. Short-term employee benefits include all, except Profit-sharing and bonuses
payable in more than twelve months after the end of the reporting period.

15.The interest on the defined benefit obligation reflects the rate at which pension
benefits could be effectively settled.

16.It is the increase in the present value of the defined benefit obligation resulting
from employee service in the current period. Current service cost

17.These are employee benefits that are payable as a result of an entity’s decision to
terminate an employee’s employment before the normal retirement date, or an
employee’s decision to accept an offer of benefits in exchange for termination of
employment Termination benefits

18.Which statement is incorrect concerning the recognition and measurement of a

defined benefit plan? The defined benefit plan must be fully funded.

19.Which of the following should be included in plan assets? Both assets held by a
long-term employee benefit fund and qualifyıng insurance policy

20.These are all forms of consideration given by an entity in exchange for services
rendered by employees. Employee benefits

21. A pension liability is reported when PBO exceeds FVPA

22.The vested benefi ts Are employee benefits that are not conditional on future
employment
23.It is an insurance policy the proceeds from which are used to pay only employee
benefits. Qualifying insurance policy

24.Which of the following is not a characteristics of short-term employee benefits?

Short-term employee benefit obligations are measured on a discounted basis

25.The service cost of a defined benefit plan comprises all, except Net interest

26.In a defined benefit plan, a formula is used that Defines the benefits that the
employee will receive at the time of retirement.

27.A pension asset is reported when FVPA exceeds PBO

28.An entity made a public announcement of a commitment to a voluntary

redundancy plan. The entity has an obligation to pay employees that choose
voluntary redundancy a lump sum equal to twice their gross annual salary. What is the
obligation to pay employees that choose voluntary redundancy? A termination
benefit

29.When an entity amends a pension plan, past service cost should be expensed in
the period the plan is amended.

30.Which of the following components of defined benefit cost shall be recognized

through other comprehensive income? Remeasurements

31.Vested benefits are defined by all of the choices.

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

contribution plan? All of these statements are true about a defined contribution
plan.

33.Employees are entitled to 10 days holiday leave per year. Unused holiday leave
may be carried forward until the employee leaves employment at which time the
entity will pay the employee for all unused holiday leave. What is the holiday leave?
Other long-term employee benefit

34.These are employee benefits which are payable after completion of employment.
Postemployment employee benefits