The total amount of cash that the employer contributes to the firm's pension plan over time is the total amount of pension expense that the employer must recognize in measuring net income.

Question

Quizplus · Accepted Answer

The total amount of cash contributed to the firm's pension plan does not necessarily equal the pension expense recognized in measuring net income. Pension expense calculation considers several factors such as service cost, interest on the pension liability, expected return on plan assets, and amortization of prior service costs, which may not directly correlate with the cash contributions made in a given period.

The Total Amount of Cash That the Employer Contributes to the Firm's