Question 1: True or false. Service co is the expense caused by the increase in the accumulated benefit obligation because of employees' service during the current year 2. The difference between the PBO and the ABO is that the PBO takes into account future salary increases, while the ABO is based on current salaries. 3. Prior servi ice cost is the increase in the PBO because of pension plan amendments. Other Comprehensive Income (PSC) is reported as part of net income. 5. 4. IFRS is that the One of the main differences in pension accounting between US GAAP and assets recognized in pension expense under IFRS is based on the discount rate, rather than the expected rate of return on pension assets 6. Executory costs should be excluded by the lessee in computing the present value of the minimum lease payments. 7. A lessee records interest expense in both a capital lease and an operating lease. 8. The distinction between a direct-financing lease and a sales-type lease is the presence or absence of a transfer of title. Capital lease is in substance the financing of an asset purchase by the lessee. 10. The lessor's accounting for leases with a residual value is based on the assumption that the 9. 11. Companies report the cash flows from purchases and sales of trading securities as cash 12. Dividends received from other companies' stocks should be reported as cash flow from 13. Interest paid to creditors should be reported as cash flows from financing activities. residual value will be realized whether it is guaranteed or not. flows from operating activities. investing activities