How Is Net Income Adjusted for Pension Costs Under the Indirect

question 94

Multiple Choice

How is net income adjusted for pension costs under the indirect method of preparing the statement of cash flows?

• A) If pension expense is greater than the amount funded, the difference between the two is added to net income.
• B) If pension expense is less than the amount funded, the difference between the two is added to net income.
• C) If pension expense is greater than the amount funded, the sum of the two is added to net income.
• D) If pension expense is less than the amount funded, the sum of the two is added to net income.

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