Under the Simplified Approach to Accounting for Defined Benefit Pension

question 48

True/False

Under the simplified approach to accounting for defined benefit pension plans under ASPE there may be a pension asset ceiling.

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Definitions:

Cost Method

An accounting method used to record investments, where the investment is recorded at its acquisition cost without recognizing periodic gains or losses.

Outstanding Stock

The total shares of a company's stock that are currently owned by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.

Net Income

The remaining earnings of a company after deducting all expenditures and taxes from the revenues.

Dividends

Distributions of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders, typically in the form of cash, stocks, or other assets.