The funds required by an organization to pay retirement benefits are reported as _____ in the financial statement.

Question

Quizplus · Accepted Answer

The funds required to pay retirement benefits represent a future cost obligation for the organization and are therefore reported as a liability on the financial statement. This liability is not a current liability as the obligation to pay retirement benefits is generally not due within the next fiscal year. It is instead a long-term liability that is reported under the heading “Long-Term Obligations,” “Long-Term Liabilities,” or “Non-Current Liabilities.” Therefore, option E, future cost obligations, is the best choice.

The Funds Required by an Organization to Pay Retirement Benefits