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    Accounting: Pension Plan

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    1. In accounting for a pension plan, any difference between the pension cost charged to expense and the payments into the fund should be reported as:

    A) an offset to the liability for prior service cost.
    B) pension asset/liability.
    C) other comprehensive income (G/L).
    D) accumulated other comprehensive income (PSC).

    2. Which of the following lease arrangements would most likely be accounted for as an operating lease by the lessee?

    A) The lease agreement runs for 15 years and the economic life of the leased property is 20 years.
    B) The present value of the minimum lease payments is $55,600 and the fair value of the leased property is $60,000.
    C) The lease agreement allows the lessee the right to purchase the leased asset for $1.00 when half of the asset's economic useful life has expired.
    D) The lessee may renew the two-year lease for an additional two years at the same rental.

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    Solution Preview

    Question 1
    B) pension asset/liability.
    This difference is recorded as prepayment or ...

    Solution Summary

    The solution discusses accounting questions regarding a pension plan.