Pensions
This term is defined as "a fund into which a sum of money is added during an employee's employment years and from which payments are drawn to support the person's retirement from work in the form of periodic payments."
What is a pension?
Executives of companies are also receive compensation that is linked to the value of the company's stock. This is referred to as _____ .
Share-based compensation.
This term describes a change from one generally accepted accounting principle (GAAP) to another.
What is a change in accounting principle?
This type of pension guarantees (to employees) fixed annual contributions to a pension plan (e.g., 5% of the employee's salary).
What is a defined contribution plan?
This is a form of employee compensation in which employees are NOT awarded shares of stock, but rather are given the option to buy shares at a specified exercise price within some specified number of years from the date of grant.
What are stock options?
In this method of handling an accounting change or error correction, the accountant fixes only the current period and all periods going forward.
What is the prospective approach?
This type of pension guarantees a fixed amount of retirement money available to employees when they retire.
What is a defined benefit plan?
Aside from stock options, other forms of share-based compensation include _____ .
What are: 1. Restricted stock awards, 2. restricted stock units, and 3. stock appreciation rights?
In this method of accounting for an accounting change or error correction, an accountant fixes the current period and all prior periods that are included in the current period financial statements.
What is the retrospective approach?
These are three accounting items that appear in the financial statement related to defined benefit plans.
What are: 1. Plan assets, 2. plan liabilities (projected benefit obligation), and 3. pension expense?
This form of EPS is calculated as net income divided by weighted average number of common shares outstanding.
What is basic EPS?
Example of this concept include: Math mistakes, mistakes in the counting of inventory, a failure to record an accounting entry, and fraud.
What is an error correction?
These are the 5 elements that appear in pension expense.
What are: 1. Service cost, 2. interest cost, 3. return on plan assets, 4. prior service costs, and 5. gains and losses on assets and liabilities?
This form of EPS adjusts for stock options that have been granted.
What is diluted EPS?
This the accounting approach an accountant should take when correcting an accounting error.
What is the retrospective approach?