The annual pension expense for what type of pension plan(s) is recorded by a journal entry that includes a debit to pension expense and a credit to a liability?

Question

Quizplus · Accepted Answer

The annual pension expense for a defined benefit plan is calculated using actuarial assumptions based on future benefits and is recorded by a journal entry that includes a debit to pension expense and a credit to a liability. In contrast, for a defined contribution plan, the employer's annual contribution is recorded as pension expense. Therefore, the correct answer is A, for a defined benefit plan only.

The Annual Pension Expense for What Type of Pension Plan(s)