Which of the Following Is Not a Step in Reporting

question 30

Multiple Choice

Which of the following is not a step in reporting a pension liability?

• A) The pension benefit payments that will ultimately be required are estimated by an actuary.
• B) The portion of those payments that are attributable to past periods of employee service is calculated.
• C) The present value of amounts attributable to past periods of employee service is determined in order to arrive at the government's obligation at the present time.
• D) Excess liability balance is shown in the government-wide financial statements as a net pension asset.
• E) Excess liability balance is shown in the government-wide financial statements as a net pension liability.

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Definitions:

Payout Ratios

Payout ratios indicate the proportion of earnings a company pays to its shareholders in the form of dividends, usually expressed as a percentage of net income.

Price-Earnings Ratio

A valuation ratio of a company's current share price compared to its per-share earnings (EPS), used to evaluate if a stock is under or overvalued.

Percentage Change

Percentage change refers to the measure of the degree of change over time, calculated as the difference between two values divided by the original value, times 100.

Base Year

A specific year against which economic or financial indices are measured to track changes and trends over time.