Indicate by letter whether each of the events listed below increase (l), decreases (D), or has no effect (N) on an employer’s projected benefit obligation. Events Interest cost. ________ Amortization of prior service cost. ________ A decrease in the average life expectancy of employees. ________ An increase in the average life expectancy of employees. ________ A plan amendment that increases benefits is made retroactive to prior years. ________ An increase in the actuary’s assumed discount rate. ________ Cash contributions to the pension fund by the employer. ________ Benefits are paid to retired employees. ________ Service cost. ________ Return on plan assets during the year are lower than expected. ________ Return on plan assets during the year are higher than expected
Indicate by letter whether each of the events listed below increase (l), decreases (D), or has no effect (N) on an employer’s projected benefit obligation. Events Interest cost. ________ Amortization of prior service cost. ________ A decrease in the average life expectancy of employees. ________ An increase in the average life expectancy of employees. ________ A plan amendment that increases benefits is made retroactive to prior years. ________ An increase in the actuary’s assumed discount rate. ________ Cash contributions to the pension fund by the employer. ________ Benefits are paid to retired employees. ________ Service cost. ________ Return on plan assets during the year are lower than expected. ________ Return on plan assets during the year are higher than expected
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Indicate by letter whether each of the events listed below increase (l), decreases (D), or has no effect (N) on an employer’s projected benefit obligation.
Events
- Interest cost. ________
- Amortization of prior service cost. ________
- A decrease in the average life expectancy of employees. ________
- An increase in the average life expectancy of employees. ________
- A plan amendment that increases benefits is made retroactive to prior years. ________
- An increase in the actuary’s assumed discount rate. ________
- Cash contributions to the pension fund by the employer. ________
- Benefits are paid to retired employees. ________
- Service cost. ________
- Return on plan assets during the year are lower than expected. ________
- Return on plan assets during the year are higher than expected. ________
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