Which statement is true concerning the recognition and measurement of a defined contribution plan? The contribution shall be recognized as an expense in the period it is payable. Any unpaid contribution at the end of the period shall be recognized as accrued liability. All statements are true. Any excess contribution shall be recognized as prepaid expense but only to the extent that the prepayment will lead to a reduction in future payments or a cash refund.

Which statement is true concerning the recognition and measurement of a defined contribution plan? The contribution shall be recognized as an expense in the period it is payable. Any unpaid contribution at the end of the period shall be recognized as accrued liability. All statements are true. Any excess contribution shall be recognized as prepaid expense but only to the extent that the prepayment will lead to a reduction in future payments or a cash refund.

PAYROLL ACCT.,2019 ED.(LL)-TEXT

19th Edition

ISBN:9781337619783

Author:BIEG

Publisher:BIEG

Chapter5: Unemployment Compensation Taxes

Section: Chapter Questions

Problem 6QR

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Which of the following is not a procedure in accounting for defined contribution plans? Remeasurements are recorded in other comprehensive income. Contributions shall be recognized as expense in the period it is payable. Any unpaid contribution at the end of the period shall be recognized as accrued expense. Any excess contribution shall be recognized as prepaid expense.
Which of the following statements are true? When an employee has rendered service to an entity during a period, the entity shall recognize the contribution payable to a defined contribution plan in exchange for that service: As a liability, after deducting any contribution already paid. If the contribution already paid exceeds the contribution due for service before the end of the reporting period, an entity shall recognize that excess as an asset, regardless if the prepayment will lead to a reduction in future payments or a cash refund, or not. Group of answer choices Only statement 2. None of the statements are true. Only statement 1. Both statements 1 and 2.
Which of the following is/are true with regard to accounting for short-term employee benefits? Unpaid short-term benefits are reported as accrued under current liabilities at an undiscounted value. If the payment exceeds the undiscounted amount of the benefits, the excess is reported as prepayment under current assets. The benefits are reported as an expense under profit or loss, unless another standard requires or permits the cost of the benefits to be capitalized. Group of answer choices Only statement 1. All statements are true. Only statement 3. Only statement 2.
1. Which is incorrect concerning the recognition and measurement of a defined contribution plan?I. An entity shall not disclose the amount recognized as expense for a defined contribution plan.II. Any unpaid contribution at the end of the period shall be recognized as accrued liability. 2. Which is incorrect concerning the recognition and measurement of a defined benefit plan?I. The defined benefit plan must be fully funded.II. The obligation is measured on a discounted basis
Which of the following items on the statement of net assets available for benefits would indicate a plan failed nondiscrimination testing? Select one: a. Excess contributions refundable/payable b. Employee contributions receivable c. Adjustment from fair value to contract value d. Adjustment from contract value to fair value
S1: Under a defined contribution plan, the amount of a participant’s future benefits is determined by the contributions paid by the employer, the participant, or both, and the operating efficiency and investment earnings of the fund. S2: Under a defined benefit plan, the payment of promised retirement benefits depends on the financial position of the plan and the ability of contributors to make future contributions to the plan as well as the investment performance and operating efficiency of the plan. Only S1 is true None is true Only S2 is true Both are true
Which of the following characteristics is/are indicative of a post-employment defined contribution plan? If actuarial or investment experience are worse than expected, the entity’s obligation may be increased. The amount to be received by the employee is determined by the amount of contributions paid by an entity to the plan, with investment returns arising from the contributions. The entity’s obligation is to provide the agreed benefits to current and former employees. The entity’s legal or constructive obligation is limited to the amount that it agrees to contribute to the fund. Group of answer choices Only statements 1 and 2. Only statements 2 and 3. Only statements 2 and 4. Only statements 3 and 4.
look over the three most important components of the pension expense. The treatment of expected and actual return on plan assets, particularly when the actual return is greater than the expected, the amortization of prior service cost and the unexpected gain/ loss. Discuss the accounting treatment of these items with suitable examples.
Amounts that come from accounts of unvested employees that can be directed/contributed to the accounts of other employees who participate and remain in the plan are known as what? Select one: a. Matching contributions b. Excess contributions c. Forfeitures d. Rollover contributions
Which of the following does not describe a defined contribution plan? The employer bears the risk of investment in a defined contribution plan. The contribution is certain but the benefit is uncertain. If the plan does poorly, the employee will share in the loss by paying more contributions. The accumulated fund on the date of an employee’s retirement determines the benefit.
An increase in OCI related to plan assets occurs when: Select one: a. The accumulated benefit obligation is more than expected. b. The vested benefit obligation is less than expected. c. Retiree benefits paid out are less than expected. d. The return on plan assets is higher than expected. e. The employer contributes an amount greater than it was liable to do.
The following reason out the use of projected salaries as the base of computing the projected benefit obligation, except failure to incorporate salary projections, when most funding is based on salary projections, may result in the reporting of an apparent overfunding when the plan is not overfunded, or in reporting adequate funding when the plan is underfunded increases in benefits attributable to a salary increase become an obligation of the plan at the time of the salary increase under final pay plans, benefits are determined by reference to salaries at or near retirement date; hence salaries, contribution levels and rates of return must be projected financial information should be prepared on a going concern basis, irrespective of the assumptions and estimates that must be made