Online Access Free T7 Exam Questions

What are the changes in the present value of the defined benefits obligation that result from experience adjustments or the effects of changes in actuarial assumptions called?

• A.Actuarial gains and losses
• B.Time value of money
• C.Current service cost
• D.Net interest on the net defined benefit liability (asset)

Paid annual leave and paid sick leave are examples of which kind of employee benefits?

• A.Short-term benefits
• B.Long-term benefits
• C.Post-employment benefits
• D.Termination benefits

What is the purpose of an income statement?

• A.To account for changes in cash during the accounting period
• B.To reconcile the beginning and ending balances of stockholders' equity
• C.To show liability and equity and the manner in which those funds are employed
• D.To show details of the nature of a company's operating activities

How do noncurrent assets (long-term assets) differ from current assets?

• A.Noncurrent assets cannot be easily converted to cash within a year
• B.Noncurrent assets cannot be easily converted to cash within two years
• C.Noncurrent assets can only be converted to cash until the subsequent fiscal year
• D.Noncurrent assets are not affected by the fiscal year

The profit-sharing plan of Company ABC requires the company pay a specified proportion of its profit for the year to employees who serve throughout the year. If no employees leave during the year, the total profit-sharing payments for the year will be 3% of profit. The company estimates that staff turnover will reduce the payments to 2.5% of profit. What does Company ABC recognize as a liability and an expense?

• A.0.5% of profit
• B.3% of profit
• C.2.5% of profit
• D.5.5% of profit