WorldatWork T7 Exam Questions

Question 6 of 89

What is the purpose of a balance sheet?

To show sources of funds and the manner in which those funds are employed

To account for changes in cash during the accounting period

To show details of the nature of a company’s operating activities

To reconcile the beginning and ending balances of stockholders’ equity

Correct Answer: A

Question 7 of 89

Which of the following describes the change in the net defined benefit liability (asset) during the period due to passage of time?

Past service cost

Current service cost

Net interest on the net defined benefit liability (asset)

Time value of money

Correct Answer: C

Question 8 of 89

In defined contribution plans when the contributions are not expected to be settled wholly before twelve months after the end of the reporting period, what must occur?

The employer must assume risk for the plan

Contributions must be discounted

Contributions must not be discounted

The employer must pay a specified amount to the employee

Correct Answer: B

Question 9 of 89

Employee benefits provided in exchange for the end of an employee’s employment are considered what kind of benefits?

Short-term benefits

Post-employment benefits

Termination benefits

Long-term benefits

Correct Answer: C

Question 10 of 89

What is a constructive obligation?

When a company recognizes the expected cost of profit-sharing and bonus payments

When a company has no realistic alternative but to make payments

When a change in the company’s informal practices would cause unacceptable damage to its relationship with employees

The required accounting entry for liabilities or accrued expenses or cash paid

Correct Answer: C