Which is the most accurate statement regarding GAAP rules for accounting for defined benefit pension plans?
A) All of the plans' transactions and other economic events that affect the plans are reflected in net income.
B) All of the plans' transactions and other economic events that affect the plans are reflected in other comprehensive income, and none are reflected in net income.
C) Some of the events that affect the plans are reflected in net income, and others are reflected in other comprehensive income.
D) No effects of these plans are shown in either net income or in other comprehensive income.

Question

Quizplus · Accepted Answer

Under GAAP rules for accounting for defined benefit pension plans, some of the events that affect the plans are reflected in net income (such as current service cost and interest cost) while others are reflected in other comprehensive income (such as actuarial gains and losses and prior service costs). Therefore, option C is the most accurate statement.

Which Is the Most Accurate Statement Regarding GAAP Rules for Accounting