The Measurement of the Accrued Benefits of a Defined Benefit

question 34

Multiple Choice

The measurement of the accrued benefits of a defined benefit plan involves assumptions about factors including:

• A) Expected value of benefits to be paid as a result of early withdrawal from the plan.
• B) Future salary levels and membership turnover.
• C) Mortality rates.
• D) Discount rates.
• E) All of the given answers.

---

Definitions:

Smoothing

An accounting practice where companies level out peaks and troughs in their financial statements over time to present a more consistent financial performance.

Pension Expense

The total cost incurred by an employer to provide pension benefits to its employees, recognized during the period the employees provide services.

Amortization

The gradual reduction of a debt over a period through regular payments covering interest and principal components.

Deferred Loss

A loss that has been incurred but is not immediately recorded in the financial statements.