CFA Practice Question

There are 334 practice questions for this study session.

CFA Practice Question

HAL Company offers a defined benefit plan for its employees and reports an unfunded accrued pension cost in its financial statements. Which of the following is true with regard to this situation?
A. The vested benefit obligation exceeds the fair value of the plan assets.
B. Cumulative net pension costs accrued exceed the vested benefit obligation.
C. Cumulative net pension costs accrued exceed HAL's contributions to the plan.
Explanation: Per SFAS No. 87, a liability [unfunded accrued pension cost] is recognized for the amount by which the cumulative net pension cost exceeds contributions to the plan.

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