1. All of the following are most likely to change the FMV of pension plan assets during a given period except:
   A.) Employer cash payments are made to the plan trustee
   B.) Changes in Internal Revenue Service regulations for future tax deductible amounts of contributions.
   C.) Actual returns on invested plan assets.
   D.) Retirement benefits paid.

B.) Changes in Internal Revenue Service regulations for future tax deductible amounts of contributions.

2. Which of the following calculations is used to determine the amount of the liability reported on the balance sheet for underfunding?
   A.) Plan assets less projected benefit obligation.
   B.) Projected benefit obligation less plan assets.
   C.) Plan assets less accumulated benefit obligation.
   D.) Accumulated benefit obligation less plan assets.

D.) Accumulated benefit obligation less plan assets.

3. The major difference between accounting for pensions and the accounting for other postretirement benefits is that firms do what?

Do not need to report an excess of the accumulated benefits obligations over assets in a postirement benefits fund as a liability on the balance sheet

4. The accumulated benefit obligation measures what?

The pension obligation on the basis of the plan formula applied to years of service to date and based on existing salary levels

5. Presented below is pension information related to Power Corp. for the year 2012: Service cost = $24,000 Interest on projected benefit obligation = 18,000 Amortization of prior service cost due to increase in benefits = 4,000 Expected return on plan assets = 6,000 The amount of pension expense to be reported for 2012 is

$40,000 (Return on plan assets decreases pension expense)

6. Which of the following is not a distinguishing characteristic of a derivative instrument?
   A.) Derivative instruments have terms that require or permit net settlement.
   B.) Derivative instruments have a low initial net investment.
   C.) Derivative instruments are highly effective throughout their term.
   D.) Derivative instruments have one or more underlyings and notional amounts

C.) Derivative instruments are highly effective throughout their term.

7. Derivatives are financial instruments that derive their value from changes in any of the following underlyings execpt:
   A.) Stock Prices
   B.) Percentage discount on accounts recievable
   C.) Interest Rates
   D.) Commodity prices

B.) Percentage discount on accounts recievable

8. Falcon Networks is a leading semiconductor company with operations in 17 different countries. Information about the company's taxes appears below: Falcon Networks Components of 2012 Income Tax Expense (in millions) Current - Federal = $ 55.65 Current Foreign = 83.85 Current State and Local = 14.69 Total Current = $154.19 Deferred - Federal = $ 30.28 Deferred Foreign = 23.89 Total Deferred = $ 54.17 Total Income Tax Expense = $208.36 Note: Falcon Networks has no current liability at year-end with respect to total current taxes. Components of Income before Taxes in 2012 United States = $256.35 Foreign = 236.85 Total = $493.20 Using the information provided by Falcon Networks what is the combined effective tax rate for 2012?

42.25%

9. The following information is taken from Satin financial statements (amounts in thousands): LIFO inventory 2010 = 219,686 2019 = 241,154 Cost of goods sold 2010 = 754,661 2009 = 675,138 Stockholders' equity 2010 = 242,503 2009 = 242,712 Net income 2010 = 31,185 2009 = 64,150 Tax rate for 2010 and 2009 = 37% Inventory Footnote: If the first-in, first-out method of accounting for inventory had been used, inventory would have been approximately $26.9 million and $25.1 million higher than reported at 12/31/2010 and 12/31/2009, respectively. What would inventories have been at 12/31/2010 under the FIFO method?

$246,586

10. An inventory pricing procedure in which the oldest costs incurred rarely have an effect on the ending inventory valuation is what?

FIFO