ACC 212: Chapter 20 questions with
correct answers 2025/2026
Pension Plan - ANS ✔✔Arrangement whereby an employer provides benefits (payments) to
retired employees for services rendered during their working years. Is a separate legal and
accounting entity
Contributory Pension Plans - ANS ✔✔Employees bear part of the costs or voluntarily put in
additional payments to increase the value of their benefits
Noncontributory Pension Plans - ANS ✔✔Employer bears all of the cost
Defined Contribution Plan - ANS ✔✔Contributions to the plan are defined, employees bear risk
Accounting is straightforward, employer's annual pension expense is the amount they are
obligated to contribute to the fund
Recorded as liability if full amount not paid, recorded as asset if more than required amount
paid
Defined Benefit Plan - ANS ✔✔Benefits for plan participants are guaranteed, thus employers
bear the risk
Must use TVOM calculation to determine how much to contribute
Most of chapter concerned with Defined Benefit Plan accounting
Pension Obligation - ANS ✔✔The deferred compensation obligation a company has to its
employees for their service under the terms of the pension plan
Variety of methods to measure this obligation
correct answers 2025/2026
Pension Plan - ANS ✔✔Arrangement whereby an employer provides benefits (payments) to
retired employees for services rendered during their working years. Is a separate legal and
accounting entity
Contributory Pension Plans - ANS ✔✔Employees bear part of the costs or voluntarily put in
additional payments to increase the value of their benefits
Noncontributory Pension Plans - ANS ✔✔Employer bears all of the cost
Defined Contribution Plan - ANS ✔✔Contributions to the plan are defined, employees bear risk
Accounting is straightforward, employer's annual pension expense is the amount they are
obligated to contribute to the fund
Recorded as liability if full amount not paid, recorded as asset if more than required amount
paid
Defined Benefit Plan - ANS ✔✔Benefits for plan participants are guaranteed, thus employers
bear the risk
Must use TVOM calculation to determine how much to contribute
Most of chapter concerned with Defined Benefit Plan accounting
Pension Obligation - ANS ✔✔The deferred compensation obligation a company has to its
employees for their service under the terms of the pension plan
Variety of methods to measure this obligation
