Which of the Following Statements Characterizes Defined Benefit Plans

question 50

Multiple Choice

Which of the following statements characterizes defined benefit plans?

• A) They are comparatively simple in construction and raise few accounting issues for employers.
• B) Retirement benefits depend on how well pension fund assets have been managed.
• C) Retirement benefits are based on the plan's benefit formula.
• D) All of these.

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Definitions:

Market Value

The going rate for an asset or service to be either bought or sold in a marketplace.

Weighted-average

A method of calculating an average that accounts for the varying significance (weights) of different items in the dataset.

Common Shares

A type of equity security that represents ownership in a corporation, with holders possibly entitled to dividends and voting rights.

Net Income

The ultimate earnings of a corporation after reducing total income by any expenses, taxes, and costs.