An Analyst Is Reviewing the Financial Statements of a Company

question 56

Multiple Choice

An analyst is reviewing the financial statements of a company and notices that the company reports a pension liability on its balance sheet.What does the pension liability represent?

• A)The present value of all future pension obligations.
• B)The amount of this year's pension expense that has not been paid yet.
• C)The increase in the pension obligation that was earned this year.
• D)The difference between the pension plan obligations and the pension plan assets.

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Definitions:

Legal Obligations

Duties enforced by law that require an individual or entity to act or refrain from acting in a certain way.

Wrongful Discharge

An illegal termination of employment, breaching contract terms or violating statutory or common law rules protecting employees.

Public Policy

The general legal principle that says no one should be allowed to do anything that tends to injure the public at large.

Perjury

In criminal law, making false statements under oath.