Unrecognized Prior Service Cost Can Be Amortized Based on Which

question 39

Multiple Choice

Unrecognized prior service cost can be amortized based on which of the following methods?

• A) Straight-line method using any systematic rational approach
• B) Straight-line method based on the average remaining service period of the qualified employees
• C) Interest method using the actuary's discount rate
• D) Service method based on the average remaining service period of the qualified employees

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Definitions:

Financial Option

A contract that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a specified price on or before a specified date.

Fixed Price

A set price that does not change over time, typically in contract agreements for goods or services, offering predictability in costs.

Pure Play Method

An approach in finance where investments are made in companies that specialize in a single line of business or sector to achieve specific exposure.

Beta

A measure of a stock's volatility in relation to the overall market; a beta above 1 means the stock is more volatile than the market, while below 1 means less.