1. In accounting for a defined-benefit pension plan
a. an appropriate funding pattern must be established to ensure that enough monies will be available at retirement to meet the benefits promised.
b. the employer's responsibility is simply to make a contribution each year based on the formula established in the plan.
c. the expense recognized each period is equal to the cash contribution.
d. the liability is determined based upon known variables that reflect future salary levelspromised to employees.

2. In a defined contribution plan, a formula is used thata. defines the benefits that the employee will receive at the time of retirementb. ensures that pension expense and the cash funding amount will be differentc. requires an employer to contribute a certain sum each period based on the formulad. ensures that employers are at risk to make sure funds are available at retirement
3. Which of the following is not a characteristic of a defined contribution pension plan?a. the employer's contribution each period is based on a formulab. the benefits to be received by employees are defined by the terms of the planc. the accounting for a defined contribution plan is straightforward and uncomplicatedd. the benefit of gain or the risk of loss from the assets contributed to the pension fund are borne by the employee
4. In a defined-benefit plan, a formula is used thata. requires that the benefit of gain or the risk of loss from the assets contributed to the pension plan be borne by the employeeb. defines the benefits that the employee will receive at the time of retirementc. requires that pension expense and the cash funding amount be the samed. defines the contribution the employer is to make; no promise is made concerning the ultimate benefits to be paid out to the employees
5. In a defined benefit plan, the process of funding refers toa. determining the projected benefit obligationb. determining the accumulated benefit obligationc. making the periodic contributions to a funding agency to ensure that funds are available to meet retirees' claimsd. determining the amount that might be reported for pension expense
6. The relationship between the amount funded and the amount reported for pension expense is as follows:a. pension expense must equal the amount fundedb. pension expense will be less than the amount fundedc. pension expense will be more than the amount fundedd. pension expense may be greater than, equal to, or less than the amount funded
7. Vested benefitsa. usually require a certain minimum number of years of serviceb. are those that the employee is entitled to receive even if firedc. are not contingent upon additional service under the pland. are defined by all of these
8. In computing the service cost component of pension expense, the FASB concluded thata. the accumulated benefit obligation provides a more realistic measure of the pension obligation on a going concern basisb. a company should employ an actuarial funding method to report pension expense that best reflects the cost of benefits to employeesc. the projected benefit obligation using future compensation levels provides a realistic measure of present pension obligation and expensed. all of these

9. In determining the present value of the prospective benefits (often referred to as the projected benefit obligation), the following are considered by the actuary:a. retirement and mortality rateb. interest ratesc. benefit provisions of the pland. all of these factors
10. The unexpected gains or losses that result from changes in the projected benefit obligation are calledasset gains & losses/liability gains & lossesa. yes/yesb. no/noc. yes/nod. no/yes