The Funded Status of a Defined Benefit Pension Plan Is

question 27

Multiple Choice

The funded status of a defined benefit pension plan is

• A) The result of comparing the actuarial value of plan assets with the plan's actuarial accrued liability for benefits.
• B) The amount by which plan assets exceed benefits due to current retirees.
• C) Current-year contributions less amounts currently due but not paid to current retirees,
• D) The policy as to whether the plan is being financed on a pay-as-you-go (cash) basis or through actuarially determined employer contributions.

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Definitions:

Residual Value

The estimated value of an asset at the end of its useful life, often used in computing depreciation or lease payments.

Depletion Rate

A measure used in accounting to allocate the cost of extracting natural resources, such as timber, minerals, and oil, from the earth over the period of their extraction.

Oil Well

A drilling operation that extracts petroleum from the ground.

Depletion Rate

The rate at which natural resources are consumed or used, often applied in accounting to allocate the cost of a natural resource over its useful life.