Which of the Following Statements Is True Concerning Prior Service

question 80

Multiple Choice

Which of the following statements is true concerning prior service cost?

• A) Prior service costs are the costs of retroactive benefits.
• B) Prior service cost is reported as a liability at the date of the plan amendment.
• C) Prior service cost is reported as a negative element of other comprehensive income at the date of the plan amendment.
• D) All of these answer choices are correct.

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Definitions:

Unrealized Holding

A gain or loss on investments that has occurred but has not yet been sold or cashed in, hence not yet realized as an income or loss.

Trading To Available-For-Sale

The process of reclassifying a security from being actively traded to being held with the intention not to sell in the near term.

Comprehensive Income

The total change in equity for a reporting period other than from transactions with owners, including all non-owner changes in equity such as unrealized gains and losses.

Fair Value

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.