In Accounting for a Pension Plan, Any Difference Between the Pension

question 11

Multiple Choice

In accounting for a pension plan, any difference between the pension cost charged to expense and the payments into the fund should be reported as

• A) An offset to the liability for prior service cost
• B) Accrued or prepaid pension cost
• C) An operating expense in this period
• D) An accrued actuarial liability

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Definitions:

Uncollectible Receivables

Amounts due from customers that are considered unattainable and likely to never be collected.

Adjusting Entry

An adjusting entry is a journal entry made at the end of an accounting period to record any unrecognized income or expenses for that period, ensuring the accounts comply with the accrual basis of accounting.

Direct Write-off Method

An accounting method where uncollectible debts are charged directly to expense as they are deemed to be uncollectible, not matching expenses to related revenues.

Allowance Method

An accounting technique that estimates and accounts for bad debts or credit losses in financial statements.