The accumulated benefit obligation measures __the shortest possible period for funding to maximize the tax deduction. __the pension obligation on the basis of the plan formula applied to years of service to date and based on future salary levels. __the level cost that will be sufficient, together with interest to provide the total benefits at retirement. __the pension obligation on the basis of the plan formula applied to years of service to date and based on existing salary levels.

The accumulated benefit obligation measures the shortest possible period for funding to maximize the tax deduction. the pension obligation on the basis of the plan formula applied to years of service to date and based on future salary levels. the level cost that will be sufficient, together with interest to provide the total benefits at retirement. the pension obligation on the basis of the plan formula applied to years of service to date and based on existing salary levels.

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter19: Deferred Compensation

Section: Chapter Questions

Problem 2DQ

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