Copyright

Pensions & Post-Retirement Benefits Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. Jennifer's employer offers a defined benefit plan. What does that mean?

Question 2 2. Which of the following is a risk associated with defined contribution plans?

Question 3 3.

Melissa has a retirement plan through her employer that allows her to make tax-deferred contributions to the account. Her employer is also permitted to make contributions to the account, and Melissa is able to withdraw money from the account under certain circumstances.


What type of plan does Melissa MOST likely have?

Question 4 4. Orange Computer Systems just implemented an employee stock option plan as a performance incentive. Which of the following is MOST accurate?

Question 5 5.

Three years ago, Matt's employer granted him the option to purchase 1,000 shares of the company's $2 par common stock. At that time, the shares were selling at $22. Matt decides to exercise his option today when the shares are selling at $39.


Calculate the benefit value of the options.

Page 2

Question 6 6. Stock options, profit sharing, and gain sharing are all examples of _____.

Question 7 7. What is the BEST definition of service cost, as it relates to defined benefit expenses?

Question 8 8. A person's lifespan, age, and medical condition are all examples of common _____ used to determine the benefits and obligations in a defined benefit pension plan.

Question 9 9. Life insurance, medical care, and pensions are all examples of possible _____.

Question 10 10. A company makes a debit to pension expense and credit to cash in its journal. Which of the following transactions is this journal entry recording?

Page 3

Question 11 11. Which type of company-sponsored retirement plan provides an individual account for each participant or employee?

Question 12 12. Jack is an employee at Horizon Enterprises. The company has recently implemented an employee stock option plan. Which of the following is MOST accurate?

Question 13 13. While _____ is based on increasing net income, _____ is based on cost savings.

Question 14 14. What are post-employment benefits?

Question 15 15. What is the defined benefit expense formula?

Page 4

Question 16 16. A shoe manufacturer has implemented a gain sharing program to encourage employees to be more efficient and reduce costs. This month, the company has reduced its costs to produce shoes from $15 per pair to $12 per pair. If the company has produced 2,000 pairs this month, how much will the employees share as a result of this savings?

Question 17 17. What do you call the type of retirement plan in which an employer promises a specified pension payment on retirement that is predetermined by a formula based on the employee's earnings history, the tenure of service, and age?

Question 18 18. Which of the following is TRUE about diluted earnings per share?

Question 19 19. As an employer, what do you call the plan or arrangement in which you will provide for your employees' income upon their retirement?

Question 20 20. Which of these creates a liability on the balance sheet?

Page 5

Question 21 21. How are benefits calculated in Fred's cash balance retirement plan?

Question 22 22. What is the vesting date of stock options?

Question 23 23. Which of the following is FALSE about gain sharing?

Question 24 24. If service cost for 2017 is $12,000, interest cost is $2,000, expected gain on plan assets is $4,000 and the company contribution is $4,000 by how much does the post retirement liability increase?

Question 25 25. What is the expected post-retirement benefit obligation (EPBO)?

Page 6

Question 26 26. What do you call the dividends, interest, and capital gains generated by assets held in a company's pension fund?

Question 27 27. FHD Company made profits of $4,000,000 last year and had an average total of 2,000,000 shares. The company paid $100,000 in preferred stock dividends, and has 500,000 diluted shares. What is the diluted earnings per share?

Question 28 28. In regards to a defined contribution plan, which among the following items is/are among those that should be disclosed in the company's financial statement notes?

Question 29 29. Consider a pension plan. If the opening plan assets are $500 million, contributions are $50 million, benefits paid are $60 million, and return on assets is $30 million, what is the end of period fund assets?

Question 30 30. Which of these is correct about a defined contribution retirement plan?

Pensions & Post-Retirement Benefits Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Accounting 202: Intermediate Accounting II  /  Business Courses
Support