Question

The accounting for defined contribution pension plans is easy because each year:a. The employer records pension expense equal to the annual contribution.b. The employer records pension expense based on the earnings of the plan assets.c. The employer records pension expense based on an amount provided by the actuary.d. The employer records pension expense equal to the amount paid out to retirees.

Answer 1

Answer:

A) The employer records pension expense equal to the annual contribution.

Explanation:

Defined contribution (DC) pension plans are retirement plans that allow both the employer and employees make contributions and invest the those funds to try to earn more money for the moment they retire. So the future benefits will change depending on the performance of the invested funds.