If the Projected Benefit Obligation of a Defined Benefit Pension

question 2

Multiple Choice

If the projected benefit obligation of a defined benefit pension plan exceeds the fair value of the pension plan assets, the employer must report

• A) The difference as a liability in the balance sheet and a corresponding adjustment to the amount of pension expense reported in earnings.
• B) The difference as a liability in the balance sheet and a corresponding adjustment to other comprehensive income, net of deferred income taxes.
• C) The difference as an asset in the balance sheet and a corresponding adjustment to the amount of pension expense reported in earnings.
• D) The difference as an asset in the balance sheet and a corresponding adjustment to other comprehensive income, net of deferred income taxes.

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Definitions:

Discretionary

Refers to actions or expenditures that are subject to judgment or choice, often within a framework of policies or guidelines.

Benefit Society

Actions or initiatives that contribute positively to the well-being and improvement of the community or society as a whole.

Economic Policy Institute

A nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions.

CEOs

Chief Executive Officers, the highest-ranking individuals in a company or organization, responsible for making major corporate decisions, managing the overall operations, and resources.