GAAP for Pension Plans Requires Companies with Defined Benefit Pension

question 9

Multiple Choice

GAAP for pension plans requires companies with defined benefit pension plans to

• A)recognize pension expense based on accrual-basis concepts
• B)recognize pension expense as an amount equal to the actual cash paid to retired employees for the current year
• C)recognize a pension liability based on the projected benefit obligation concept
• D)disclose annual pension cost in a footnote only; pension cost was not required to be reported on the income statement

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Definitions:

Dictator Game

An experimental game in behavioural economics where one player, the "dictator," determines how to split a reward between themselves and another player.

Ultimatum Game

A game in experimental economics where two players decide on how to divide a sum of money; one proposes a split, and the other player can accept or reject.

Invisible Hand

A term coined by Adam Smith to describe the self-regulating nature of the marketplace, where individuals pursuing their own interests unintentionally benefit society.

Precommitments

Strategies or commitments made in advance to limit or define future actions or decisions.