Entity a Contributes to a Defined Benefit Superannuation Plan for Its

question 50

Multiple Choice

Entity A contributes to a defined benefit superannuation plan for its employees.It calculates the following:
$$\begin{array} { | l | l | } \hline \text { Present value of the obligation } & 12286 \\\hline \text { Fair value of plan assets } & \underline {11500} \\\hline & \underline { 786 } \\\hline\end{array}$$
The $786 represents:

• A) the expense to be recognised in the statement of comprehensive income.
• B) the asset to be recognised in the statement of financial position.
• C) the liability to be recognised in the statement of financial position.
• D) the revenue to be recognised in the statement of comprehensive income.

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Definitions:

Excess Capacity

The situation where a company's production facilities are capable of producing more than the demand for its products.

Variable Costs

Expenses that vary directly with the level of production or sales volume, such as raw materials and direct labor.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent or salaries.

Specialist Medical Equipment

High-tech and advanced medical tools and devices specifically designed for certain branches of medicine to diagnose or treat diseases effectively.