Amortization of Any Net Gain or Loss Is Included in Pension

question 57

Multiple Choice

Amortization of any net gain or loss is included in pension expense of a given year if at the

• A) end of the year, the cumulative net gain or loss exceeds 10% of the greater of the actual projected benefit obligation or the fair value of the plan assets.
• B) beginning of the year, the cumulative net gain or loss exceeds 10% of the greater of the actual accumulated benefit obligation or the fair value of the plan assets.
• C) end of the year, the cumulative gain or loss exceeds 10% of the greater of the actual accumulated benefit obligation or the fair value of the plan assets.
• D) beginning of the year, the cumulative gain or loss exceeds 10% of the greater of the actual projected benefit obligation or the fair value of the plan assets.

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Definitions:

Purchase Discount

A deduction that a buyer receives on the invoice price of a purchase if the payment is made within a specified period.

Prepaid Freight

Costs paid in advance for the transportation of goods, often recorded as an asset on the balance sheet until the service is utilized.

Merchandise Inventory

Goods that a company holds with the intent to sell them as part of its primary operations.

Perpetual Inventory System

A method of inventory management where records are updated in real-time with every sale and restocking.