Entity a Contributes to a Defined Benefit Superannuation Plan for Its

question 1

Multiple Choice

Entity A contributes to a defined benefit superannuation plan for its employees.It calculates the following: Current service cost 12,785
Interest cost 983
Expected return on plan assets (1,150)
Net actuarial gain recognised in period (1,835)
10,783
The $10,783 represents:

• A) The expense to be recognised in the income statement.
• B) The asset to be recognised in the balance sheet.
• C) The liability to be recognised in the balance sheet.
• D) The revenue to be recognised in the income statement.
• E) The cash flow pertaining to the contributions made for the period.

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Definitions:

Straight-Line Depreciation

A way to distribute the expense of a concrete asset throughout its life expectancy in uniform annual figures.

Present Value Interest Factors

A factor that can be used to calculate the present value of a sum that is to be received in the future.

Guaranteed Residual Value

The predetermined value guaranteed to the lessee by the lessor or a third party, ensuring the asset will have a certain value at the end of the lease term.

Maintenance Agreement

A contract in which one party agrees to maintain an asset owned by another party, typically involving regular service checks and repairs.