In 20X6, General Dynamics (GD) had a Prepaid Pension Asset of $12.4 billion, total assets of $495 billion, and net income of $13.7 billion. This means that
A) GD's pension plan was underfunded by $12.4 billion.
B) GD recorded a nonrecurring item on the income statement for $12.4 billion.
C) GD's pension plan was overfunded by $12.4 billion.
D) GD had extraordinary liabilities of $12.4 billion.

Question

Quizplus · Accepted Answer

A Prepaid Pension Asset indicates that the pension plan is overfunded, meaning GD has contributed more to the pension plan than the current obligation, not underfunded or related to extraordinary liabilities or nonrecurring items on the income statement.

In 20X6, General Dynamics (GD) Had a Prepaid Pension Asset