What Is the Proper Treatment of Pension Expense When Computing

question 39

Multiple Choice

What is the proper treatment of pension expense when computing net cash from operating activities using the indirect method?

• A) net income is increased by the excess of the expense over the cash used to fund the plan
• B) net income is increased by the sum of the expense plus the cash used to fund the plan
• C) net income is increased by pension expense
• D) net income is decreased by the cash used to fund the plan

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Definitions:

Managers

Individuals in an organization responsible for directing and overseeing the work of a group of people.

Emotional Intelligence (EI)

The ability to understand, manage, and articulate one's feelings, while also dealing with others' relationships carefully and with empathy.

Self-Awareness

The awareness of one's own personality, emotions, motivations, and wants.

Self-Control

The ability to regulate one's emotions, thoughts, and behavior in the face of temptations and impulses.