_1. If a company has an underfunded defined-benefit pension plan: A. no payment may be made to retirees until the company deposits all the necessary assets into the pension fund. B. the difference between fund assets and amounts owed to retirees will still be paid by the federal Pension Benefit Guaranty Corporation. C. the value of the PBO must be precisely the same as the amount of assets set aside by the company to pay pension benefits. D. All the above are true. E. None of the above is true. _2. Which of the following is a TRUE sentence with regard to a defined-contribution pension plan? A. Both the employer and employee must make annual payments to the plan. B. It does not matter to the employee whether the company has a defined- benefit plan or a defined-contribution plan, because the employee still has retirement benefits. C. A 401(k) plan is an example of a defined-contribution plan. D. All the above are true. E. None of the above is true. _3. The Public Company Accounting Oversight Board: A. establishes accounting principles only for issuers. B. interacts with the International Accounting Standards Board in an effort to bring about "convergence." C. must file an annual Form 10-K with the Securities and Exchange Commission. D. All the above are true. E. None of the above is true. _4. Unlike the assets set aside for a defined-benefit pension plan, defined- contribution pension plan assets: A. are held by the individual employees/participants in income-producing investment accounts. B. are reported in the sponsoring company's financial statements. C. must be invested entirely in the sponsoring company's securities. D. All the above are true. E. None of the above is true.
_1. If a company has an underfunded defined-benefit pension plan: A. no payment may be made to retirees until the company deposits all the necessary assets into the pension fund. B. the difference between fund assets and amounts owed to retirees will still be paid by the federal Pension Benefit Guaranty Corporation. C. the value of the PBO must be precisely the same as the amount of assets set aside by the company to pay pension benefits. D. All the above are true. E. None of the above is true. _2. Which of the following is a TRUE sentence with regard to a defined-contribution pension plan? A. Both the employer and employee must make annual payments to the plan. B. It does not matter to the employee whether the company has a defined- benefit plan or a defined-contribution plan, because the employee still has retirement benefits. C. A 401(k) plan is an example of a defined-contribution plan. D. All the above are true. E. None of the above is true. _3. The Public Company Accounting Oversight Board: A. establishes accounting principles only for issuers. B. interacts with the International Accounting Standards Board in an effort to bring about "convergence." C. must file an annual Form 10-K with the Securities and Exchange Commission. D. All the above are true. E. None of the above is true. _4. Unlike the assets set aside for a defined-benefit pension plan, defined- contribution pension plan assets: A. are held by the individual employees/participants in income-producing investment accounts. B. are reported in the sponsoring company's financial statements. C. must be invested entirely in the sponsoring company's securities. D. All the above are true. E. None of the above is true.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:_1. If a company has an underfunded defined-benefit pension plan:
A. no payment may be made to retirees until the company deposits all the
necessary assets into the pension fund.
B. the difference between fund assets and amounts owed to retirees will still
be paid by the federal Pension Benefit Guaranty Corporation.
C. the value of the PBO must be precisely the same as the amount of assets
set aside by the company to pay pension benefits.
D. All the above are true.
E. None of the above is true.
2. Which of the following is a TRUE sentence with regard to a defined-contribution
pension plan?
A. Both the employer and employee must make annual payments to the plan.
B. It does not matter to the employee whether the company has a defined-
benefit plan or a defined-contribution plan, because the employee still has
retirement benefits.
C. A 401(k) plan is an example of a defined-contribution plan.
D. All the above are true.
E. None of the above is true.
_3. The Public Company Accounting Oversight Board:
A. establishes accounting principles only for issuers.
B. interacts with the International Accounting Standards Board in an effort to
bring about "convergence."
C. must file an annual Form 10-K with the Securities and Exchange
Commission.
D. All the above are true.
E. None of the above is true.
4. Unlike the assets set aside for a defined-benefit pension plan, defined-
contribution pension plan assets:
A. are held by the individual employees/participants in income-producing
investment accounts.
B. are reported in the sponsoring company's financial statements.
C. must be invested entirely in the sponsoring company's securities.
D. All the above are true.
E. None of the above is true.
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