91. Which of the following are factors in determining pension expense?
A. Average age, retirement age, and life expectancy of employees.
B. Employee turnover rate.
C. Expected rate of return to be earned by the pension fund.
D. All three of the above.
92. The pension expense of the current period is equal to:
A. Amounts paid to retired workers during the current period.
B. The estimated future pension benefits earned by today's workers during the current period.
C. The present value of the estimated future pension benefits earned by today's workers during the current period.
D. Cash payments made during the period to the trustee of the pension plan.
93. A company with a fully funded pension plan:
A. Recognizes no pension expense.
B. Reports no long-term liability for future pension payments.
C. Does not utilize the services of a trustee to operate the pension plan.
D. Recognizes pension expense equal to the cash payments made to retirees during the current period.
94. The amortization of a bond premium:
A. Decreases the carrying value of a bond and increases interest expense.
B. Decreases the carrying value of a bond and decreases interest expense.
C. Increases the carrying value of a bond and increases interest expense.
D. Increases the carrying value of a bond and decreases interest expense.
95. In estimating annual pension expense, which of the following factors would not be taken into consideration?
A. Current financial condition of the company.
B. Expected rate of return to be earned on pension fund assets.
C. Employee turnover rates.
D. Compensation levels and estimated rate of pay increases.
96. Is the present value of an amount
A. Always greater than the future value.
B. Always less than the future value.
C. Always equal to the future value.
D. Greater than, less than, or equal to the future value depending upon interest rates and the time period involved.
97. Pension expense is:
A. The present value of the estimated future pension benefits earned by employees as a result of their services during the period.
B. The amount funded to the pension in a given year.
C. The future value of rights granted to employees as a result of their services during the period.
D. The amount withdrawn from the pension fund to pay retirees during the period.
98. Which of the following is not true about postretirement benefits?
A. Postretirement costs should be recognized as expense as the workers earn the right to receive the benefits.
B. Most corporations have fully funded their postretirement benefits.
C. Unfunded postretirement costs are a non-cash expense.
D. A corporation's liability for postretirement benefits is equal to the present value of estimated future payments.
99. A liability for deferred income taxes represents:
A. Income taxes on earnings already reported in the income statement, but that will be taxed in future periods.
B. Income taxes already paid on earnings which have not yet been reported in the company's income statement.
C. Income tax obligations being disputed with the Internal Revenue Service.
D. Income taxes levied in prior years which are now past due.
100. In a statement of cash flows, most interest payments are classified as:
A. Operating activities.
B. Non-operating activities.
C. Financing activities.
D. Current liabilities.