When the Service Method Is Used for Amortizing Prior Service

question 226

Multiple Choice

When the service method is used for amortizing prior service costs, the amount recognized each year is:

• A) In proportion to the fraction of the total remaining service years worked during the year.
• B) A constant amount or fixed amount.
• C) Prior service cost divided by the average remaining service life of the active employee group.
• D) Prior service cost divided by the average estimated retirement age of the currently enrolled employee group.

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Definitions:

Ineffective

Lacking the ability or success in producing a desired or intended result.

Time Efficient

Making the best possible use of time to ensure task completion or goal achievement with minimal wasted time.

Cultural Heritage

The legacy of physical artifacts and intangible attributes of a group or society inherited from past generations.

Sociohistorical Heritage

The social and historical background or traditions that influence a person or community.