To Determine Whether a Pension Plan Is Over-Funded or Under-Funded

question 49

Multiple Choice

To determine whether a pension plan is over-funded or under-funded, a company must compare the:

• A) fair market value of the pension plan assets to the accumulated benefit obligation.
• B) cost of the pension plan assets to the accumulated benefit obligation.
• C) accumulated benefit obligation to the plan's anticipated obligations.
• D) fair market value of the pension plan assets to the net income on the Income Statement.

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Definitions:

Decrease Production

The act of reducing the quantity of goods produced by a business or economy.

Firm Should

Advises or considerations regarding strategic decisions that businesses ought to follow to achieve objectives such as profitability, growth, or sustainability.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually pay.

Maximum Willingness

The highest amount an individual or entity is ready to pay for a good or service.