Which Statement About "Defined Contribution Plans" Is Correct

question 31

Multiple Choice

Which statement about "defined contribution plans" is correct?

• A)Pension expense equals the contributions made based on the plan formula.
• B)Pension expense equals the present value of the future benefits to be paid to the retiree.
• C)Pension cost cannot be capitalized to the cost of inventory.
• D)Pension cost may not be capitalized to the construction cost of property,plant and equipment.

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Definitions:

Amortization

The process of gradually writing off the initial cost of an intangible asset over a period, reflecting the asset's consumption, expiry, or decline in value over time.

Noncontrolling Interest

A minority stake in a company that is reflected in the consolidated financial statements, representing the portion of subsidiaries not owned by the parent company.

Goodwill

An intangible asset that arises when a company acquires another company for a price higher than the fair value of its net assets, reflecting the value of its brand, customer base, and other non-tangible assets.

Acquisition

The process by which one company takes control over another company either by purchasing its shares, assets, or both.