Question 1

What is the journal entry to record compensation expense for Year 1?

Accepted Answer

A)   
B)   
C)   
D)   E) A) and D)
F) B) and D)

Question 2

Refer to Walker Corporation.On April 1,Year 7,when the market price of Walker's stock was $20 per share,15,000 of the options were exercised.Make the appropriate journal entry to record this transaction.

Accepted Answer

The answer of Refer to Walker Corporation.On April 1,Year 7,when...

Question 3

What is the entry to record the expiration of 15% of the options on December 31,Year 5?

Accepted Answer

A)   
B)   
C)   
D)   E) A) and B)
F) C) and D)

Question 4

In non-compensatory employee stock purchase plans,a company will record the amount of the discount below the regular market price as compensation expense.

Accepted Answer

A) True 
 B)False

Question 5

List and explain the three methods used to measure a company's pension obligation to its employees.

Accepted Answer

1.Vested benefit obligation (VBO)-This m...

Question 6

List the four key areas that minimum disclosures for stock-based compensation plans must address.

Accepted Answer

1.The nature and terms of the stock-base...

Question 7

Which of the following statements is true regarding share appreciation rights (SAR) payable in cash?

Accepted Answer

A)  Changes in estimated total compensation are recorded as prior period adjustments.
B)  The amount of compensation under the SAR plan is unknown until the rights are actually exercised.
C)  At the time of exercise a participant may receive either cash or common stock.
D)  Deferred compensation expense is recorded at the time the share appreciation rights are granted.E) A) and B)
F) A) and C)

Question 8

The compensation associated with equity classified awards is ________.

Accepted Answer

A)  the estimated book value of the options
B)  the estimated fair value of the options
C)  allocated to compensation expense until the options expire
D)  recorded as compensation expense when the options are grantedE) A) and C)
F) A) and D)

Question 9

In a contributory pension plan,employees must fund some or all of their pension costs.

Accepted Answer

A) True 
 B)False

Question 10

The value of forfeited stock options reduce compensation expense.

Accepted Answer

A) True 
 B)False

Question 11

Equity classified awards should be reported as compensation expense ________.

Accepted Answer

A)  using the book value method
B)  at the date of grant
C)  using the fair value method
D)  at the date of exerciseE) A) and B)
F) None of the above

Question 12

Which of the following is not a key element of a defined benefit pension plan?

Accepted Answer

A)  amortization of future benefit obligations
B)  service cost
C)  expected return on plan assets
D)  interest on projected benefit obligationE) B) and C)
F) All of the above

Question 13

Which of the following is not a situation in which employee compensation is classified as a liability?

Accepted Answer

A)  The option is granted for the acquisition of securities classified as equity securities.
B)  The option is granted for the acquisition of securities classified as liabilities,such as redeemable preferred stock
C)  The employee can sell back the acquired shares to the employer corporation at the exercise price within a reasonable period of time.
D)  The compensation is in the form of stock appreciation rights.E) All of the above
F) C) and D)

Question 14

What is the primary difference in defined-benefit pension disclosures between U.S.GAAP and IFRS?

Accepted Answer

Under U.S.GAAP,all pension cost componen...

Question 15

What is the total compensation cost for this plan?

Accepted Answer

A)  $80,000
B)  $160,000
C)  $240,000
D)  $480,000E) None of the above
F) A) and C)

Question 16

At the beginning of the current year,Bridges Corporation has a net gain-Accumulated Other Comprehensive Net Income of $80,000,000.The Projected Benefit Obligation and the plan assets are $500,000,000 and $650,000,000 respectively.The average remaining service period for the employees to receive benefits is 15 years.What is the amount of amortization to pension expense for the year?

Accepted Answer

A)  $1,000,000
B)  $1,500,000
C)  $2,000,000
D)  $8,000,000E) All of the above
F) B) and D)

Question 17

Which of the following conditions is not required for an employee stock purchase plan to be non-compensatory?

Accepted Answer

A)  The plan is made available to substantially all employees.
B)  After the plan is established,there is a maximum one month period to elect to participate in the plan.
C)  The discount is not larger than 5% of the open market price.
D)  Top-level employees may purchase no more than a set percentage of shares available.E) A) and D)
F) All of the above

Question 18

The initial journal entry to record an equity-classified award serves as a disclosure for a stock option plan.

Accepted Answer

A) True 
 B)False

Question 19

Under a defined benefit plan,the contribution is fixed but benefits can vary.

Accepted Answer

A) True 
 B)False

Question 20

Under a defined contribution pension plan,the contribution is fixed but benefits can vary.

Accepted Answer

A) True 
 B)False

Exam 20: Accounting for Employee Compensation and Benefits

Which of the following statements is true regarding share appreciation rights (SAR) payable in cash?

Correct Answer
verified

What is the primary difference in defined-benefit pension disclosures between U.S.GAAP and IFRS?

Correct Answer
verified
Under U.S.GAAP,all pension cost componen...
View Answer

Refer to Walker Corporation.On April 1,Year 7,when the market price of Walker's stock was $20 per share,15,000 of the options were exercised.Make the appropriate journal entry to record this transaction.

Correct Answer
verified

What is the entry to record the expiration of 15% of the options on December 31,Year 5?

Correct Answer
verified

List and explain the three methods used to measure a company's pension obligation to its employees.

Correct Answer
verified
1.Vested benefit obligation (VBO)-This m...
View Answer

Correct Answer
verified

What is the total compensation cost for this plan?

Correct Answer
verified

The compensation associated with equity classified awards is ________.

Correct Answer
verified

Equity classified awards should be reported as compensation expense ________.

Correct Answer
verified

Under a defined contribution pension plan,the contribution is fixed but benefits can vary.

Correct Answer
verified

Under a defined benefit plan,the contribution is fixed but benefits can vary.

Correct Answer
verified

List the four key areas that minimum disclosures for stock-based compensation plans must address.

Correct Answer
verified
1.The nature and terms of the stock-base...
View Answer

Which of the following is not a key element of a defined benefit pension plan?

Correct Answer
verified

In non-compensatory employee stock purchase plans,a company will record the amount of the discount below the regular market price as compensation expense.

Correct Answer
verified

The value of forfeited stock options reduce compensation expense.

Correct Answer
verified

Which of the following conditions is not required for an employee stock purchase plan to be non-compensatory?

Correct Answer
verified

The initial journal entry to record an equity-classified award serves as a disclosure for a stock option plan.

Correct Answer
verified

What is the journal entry to record compensation expense for Year 1?

Correct Answer
verified

Which of the following is not a situation in which employee compensation is classified as a liability?

Correct Answer
verified

In a contributory pension plan,employees must fund some or all of their pension costs.

Correct Answer
verified

Exam 20: Accounting for Employee Compensation and Benefits

Which of the following statements is true regarding share appreciation rights (SAR) payable in cash?

Correct AnswerverifiedShow Answer

What is the primary difference in defined-benefit pension disclosures between U.S.GAAP and IFRS?

Correct AnswerverifiedUnder U.S.GAAP,all pension cost componen...View AnswerShow Answer

Refer to Walker Corporation.On April 1,Year 7,when the market price of Walker's stock was $20 per share,15,000 of the options were exercised.Make the appropriate journal entry to record this transaction.

Correct AnswerverifiedShow Answer

What is the entry to record the expiration of 15% of the options on December 31,Year 5?

Correct AnswerverifiedShow Answer

List and explain the three methods used to measure a company's pension obligation to its employees.

Correct Answerverified1.Vested benefit obligation (VBO)-This m...View AnswerShow Answer

Correct AnswerverifiedShow Answer

What is the total compensation cost for this plan?

Correct AnswerverifiedShow Answer

The compensation associated with equity classified awards is ________.

Correct AnswerverifiedShow Answer

Equity classified awards should be reported as compensation expense ________.

Correct AnswerverifiedShow Answer

Under a defined contribution pension plan,the contribution is fixed but benefits can vary.

Correct AnswerverifiedShow Answer

Under a defined benefit plan,the contribution is fixed but benefits can vary.

Correct AnswerverifiedShow Answer

List the four key areas that minimum disclosures for stock-based compensation plans must address.

Correct Answerverified1.The nature and terms of the stock-base...View AnswerShow Answer

Which of the following is not a key element of a defined benefit pension plan?

Correct AnswerverifiedShow Answer

In non-compensatory employee stock purchase plans,a company will record the amount of the discount below the regular market price as compensation expense.

Correct AnswerverifiedShow Answer

The value of forfeited stock options reduce compensation expense.

Correct AnswerverifiedShow Answer

Which of the following conditions is not required for an employee stock purchase plan to be non-compensatory?

Correct AnswerverifiedShow Answer

The initial journal entry to record an equity-classified award serves as a disclosure for a stock option plan.

Correct AnswerverifiedShow Answer

What is the journal entry to record compensation expense for Year 1?

Correct AnswerverifiedShow Answer

Which of the following is not a situation in which employee compensation is classified as a liability?

Correct AnswerverifiedShow Answer

In a contributory pension plan,employees must fund some or all of their pension costs.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
Under U.S.GAAP,all pension cost componen...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
1.Vested benefit obligation (VBO)-This m...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
1.The nature and terms of the stock-base...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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