1.

Employee future benefits do NOT include

c. regular vacation pay.
2. The relationship between the amount funded and the amount reported for pension expense is that
d. pension expense may be greater than, equal to, or less than the amount funded.
3. In a defined contribution plan, a formula is used that
c. requires an employer to contribute a certain sum each period based on the formula.
4. In a defined benefit plan, a formula is used that
b. defines the benefits that the employee will receive at retirement.
5. The objective of accounting for defined benefit plans is to
b. recognize the appropriate expense and liability over the accounting periods in which the related
services are provided by the employees.
6. In a defined benefit plan, for the employer, the term funding refers to
c. making periodic contributions to a funding agency to ensure that funds are available to meet
retirees' claims.
7. Accounting problems for all pension plans may include all the following EXCEPT
a. determining the level of individual premiums.
8. In pension accounting, the actuarys main purpose is to
d. ensure the employer has established an appropriate funding pattern to meet its pension
obligations.
9. Under IFRS, the defined benefit obligation for accounting purposes is
a. the present value of vested and non-vested benefits earned to the statement of financial position
date, with the benefits measured using employees future salary levels.
10. Which statement is INCORRECT regarding vested benefits?
d. They are lost when the employee is terminated.
11. The defined benefit obligation (accrued benefit obligation under ASPE) is always increased by
b. current service cost and interest cost.
12. For defined benefit plans, the attribution period for employees is the time between
c. the hire date and the date the employee becomes eligible for full benefits.
13. An experience gain or loss is
d. the difference between what has occurred and the previous actuarial assumptions.
14. Pension plan assets include
a. contributions made by the employer and the employees in a contributory pension plan.
15. The return on plan assets
b. includes interest, dividends, and gains or losses from the sale of investments.
16. The difference between the defined (accrued) benefit obligation and the pension assets fair value at
any point in time is known as the plans
b. funded status.
17. Under IFRS, the defined benefit obligation is adjusted to its most recent actuarial valuation, and the
adjustment flows through
a. other comprehensive income.
18. In applying the immediate recognition approach under IFRS, any difference between the pension
expense and the payments into the fund should be reflected in
c. the net defined benefit liability/asset.
19. Using the immediate recognition approach, any past service costs should be included in the
c. pension expense of the current period.
20. Using the immediate recognition approach under IFRS, a net defined benefit asset is reported when
b. the fair value of pension plan assets exceeds the defined benefit obligation.

21. Using the immediate recognition approach under IFRS,

a. there is a general ledger account called net defined benefit liability/asset.
22. Under the immediate recognition approach, all past service costs are expensed. The rationale for
doing this is that
c. they relate to past services, so there is no justification for deferring their recognition to future
periods.
23. An advantage of the immediate recognition approach (IFRS) is that
a. the Net Defined Benefit Liability/Asset account reflects the actual funded status of the pension
plan.
24. Which of the following statements is INCORRECT?
c. IFRS specifies how the components of pension benefit costs are to be reported on the income
statement.
25. Post-employment benefits may include all of the following EXCEPT
b. severance pay to laid-off employees.
26. Regarding post-employment health care benefits,
c. the beneficiary is the retiree, spouse, and other dependents.
27. Accrued post-employment benefit obligations are
b. recorded in the same manner as pension benefit obligations.
28. Which of the following disclosures of post-employment benefits would NOT be required?
c. the amount of the actuarial liability for short term benefits such as paternity leave
*29. Using the deferral and amortization approach, unrecognized net actuarial gains and losses should be
b. recorded currently and in the future by applying the corridor method which provides the amount to
be amortized.
*30. Corridor amortization for net actuarial gains and losses
d.amortizes the net accumulated gain or loss when its balance is considered too large.
1. An essential element in a lease agreement is that the
b. lessor transfers less than the total interest in the property.
2. Executory costs include
c. insurance, maintenance and property taxes.
3. Which of the following is NOT a potential advantage of leasing?
a. no tax advantages for the lessor
4. Which of the following best describes current standards in accounting for leases?
b. Leases similar to instalment purchases are capitalized.
5. Which of the following is a correct statement regarding one of the ASPE capitalization criteria?
c. The lease term is 75% or more of the leased propertys estimated economic life.
6. For a lessee, the minimum lease payments may include
d. the minimum rental payments, a bargain purchase option, and a guaranteed residual value.
7. In calculating the present value of the minimum lease payments, IFRS requires the lessee should
d. use the interest rate implicit in the lease whenever this is reasonably determinable, otherwise use
the lessees incremental borrowing rate.
8. Regarding a basic capital (finance) lease for a lessee, which of the following statements is
INCORRECT?
c. The lessor uses the lease as a source of funding.
9. When a lessee is accounting for a capital (finance) lease
c. a guaranteed residual value is basically an additional lease payment due at the end of the lease.
10. In calculating depreciation of a leased asset, the lessee should subtract a(n)
a. guaranteed residual value and depreciate over the term of the lease.

11. In the earlier years of a lease, from the lessee's perspective, accounting for a leased asset as
b. a finance lease will cause debt to increase, compared to accounting for it as an operating lease.
12. Obligations under leases should be disclosed as
c. the current portion in current liabilities and the remainder in noncurrent liabilities.
13. For companies engaged in direct financing leases (ASPE) or finance leases (IFRS)
c. their objective is to earn interest income on the financing arrangement with the lessee.
14. For a lessor, which of the following would NOT be included in the Gross Investment in Lease (Lease
Receivable)?
d. executory costs
15. In a lease that is appropriately recorded as a direct financing lease (ASPE) or finance lease (IFRS) by
the lessor, the unearned interest income is
a. amortized and taken into income over the lease term using the effective interest method.
16. For a sales-type lease (ASPE) or manufacturer or dealer lease (IFRS),
c. the gross profit will be the same whether the residual value is guaranteed or unguaranteed.
17. Initial direct costs are
d. deferred and allocated over the term of an operating lease in proportion to the amount of rental
(lease) income that is recognized.
*18. If a corporation adhering to IFRS sells machinery at fair value and then leases it back (saleleaseback) as a finance lease, any gain on the sale should be
c. deferred and amortized to income over the term of the lease.
*19. If land is the sole property being leased, and title does NOT transfer at the end of the lease, it should
be accounted for as a(n)
a. operating lease.
*20. Which statement is correct regarding the contract-based approach advocated by the IASB and
FASB?
d. The asset taken on by the lessee is viewed as the contractual right to the use the asset, not the
transfer of the asset itself.