Which of the following is not a criticism of pension accounting and reporting?

Multiple Choice

Some argue that service cost should be the only component of pension expense.

Management has the discretion with respect to choosing the expected rate of return on plan assets.

Some argue that operating income is misstated due to the deduction of pension expense.

Net income immediately includes fund asset gains and losses, as well as projected benefit obligation actuarial gains and losses.

 

When a publicly traded company issues both common stock and preferred stock, the SEC requires that:

Multiple Choice

preferred and common stock be combined in the equity section.

preferred and common stock be clearly differentiated on the balance sheet.

all preferred stock be shown as a liability.

mandatorily redeemable preferred stock be shown as a liability.

 

The Revised Model Business Corporation Act defines solvency as a situation where the fair value of:

Multiple Choice

liabilities exceeds the fair value of assets after a distribution to shareholders.

assets exceeds the fair value of liabilities after a distribution to shareholders.

liabilities exceeds the fair value of assets.

assets exceeds the book value of liabilities after a distribution to shareholders.

Answer rating: 100% (QA)

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