How Is the Pension Expense Calculated for a Defined-Contribution Plan

question 32

Multiple Choice

How is the pension expense calculated for a defined-contribution plan?

• A)Based on the contributions made by the employer that year.
• B)Based on the expected portion of future benefits that were earned that period.
• C)Based on the expected portion of current benefits that were earned that period
• D)Based on the amount that the employer should contribute this year to meet the future expected benefit earned this year.

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Definitions:

Encoding

The process of converting information into a particular form that allows for communication or storage.

Decoding

The process by which a receiver interprets and understands a message sent by a sender.

Feedback

In the feedback loop, the sender’s interpretation of the response, which indicates whether a message was decoded and understood as intended during the communication process.

Communication Process

The series of steps through which information is transmitted from one individual or entity to another, typically involving a sender, message, medium, and receiver.