Which of the following matters affecting a pension plan during a year does directly affect the expense shown in the income statement?
A) Service cost
B) Unexpectedly good earnings on the pension plan assets
C) Changes in the assumptions about future earnings of employees
D) Changes in assumptions about future life expectancy of retirees

Question

Quizplus · Accepted Answer

Service cost is the portion of the total pension expense that represents the increase in the present value of the pension benefits earned by employees during the current year. This directly affects the expense shown in the income statement.

Which of the Following Matters Affecting a Pension Plan During