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.