To Compute the Amortization on the Cumulative Unrecognized Gains and Losses

question 21

Multiple Choice

To compute the amortization on the cumulative unrecognized gains and losses for a pension plan,the corridor is computed as 10% of the

• A)average of the beginning balances of the plan assets and the projected benefit obligation.
• B)higher of the beginning balances of the plan assets or the accumulated benefit obligation.
• C)higher of the beginning market-related value of the plan assets or the projected benefit obligation.
• D)lower of the beginning market-related value of the plan assets or the projected benefit obligation.

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Definitions:

Real Variable

A variable, such as income or output, that has been adjusted for inflation, reflecting true purchasing power.

Recession

A period of temporary economic decline during which trade and industrial activities are reduced, generally identified by a fall in GDP in two successive quarters.

Net Exports

The value of a country's total exports minus the value of its total imports, representing a component of a nation's GDP.

Short Run

A period in which at least one input is fixed, limiting the ability of a firm to adjust all of its inputs to change output.