The Actual Return on Plan Assets

question 23

Multiple Choice

The actual return on plan assets

• A) is equal to the change in the fair value of the plan assets during the year.
• B) includes interest, dividends, and changes in the fair value of the fund assets.
• C) is equal to the expected rate of return times the fair value of the plan assets at the beginning of the period.
• D) All of these answers are correct.

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Definitions:

Vertical Equity

A principle of taxation that states taxpayers with a greater ability to pay taxes should contribute a larger amount.

Tax Theory

The set of principles and frameworks that describe how taxes impact the economy, individual behavior, and the distribution of income.

Economic Income

The sum of an individual's or firm's earnings from various sources, including wages, investments, and other financial gains, adjusted for inflation over a certain period.