The Projected Returns Exceed Actual Returns on Pension Plan Assets

question 2

Multiple Choice

The projected returns exceed actual returns on pension plan assets for a government offering a defined benefit pension plan. How would the resulting increase in the net pension liability be recognized in the financial statements in the year this difference is recognized?

• A) The increase in net pension liability would be expensed in the period the plan is changed.
• B) The increase in net pension liability would be deferred and amortized over the remaining service life of the employees.
• C) The increase in net pension liability would be deferred and amortized over five years.
• D) The increase in net pension liability would be deferred and amortized over ten years.

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Definitions:

Non-Linguistic Accompaniment

Components of communication other than spoken language, including gestures, facial expressions, and other body language, that complement or enhance the message.

Paralanguage

The non-linguistic accompaniments of speech such as stress, pitch, speed, tone, pauses.

Gestures

Meaningful body movements and postures.

Facial Muscle Activity

Movements of the muscles in the face that are often analyzed to understand emotions and expressions.