1.

Employee benefits are

a. All forms of consideration given by an entity in
exchange for service rendered by employees or for
the termination of employment.
b. Benefits that are payable after the completion of
employment.
c. Benefits that are expected to be settled wholly
before twelve months after the end of the annual
reporting period in which the employees render the
related service.
d. Benefits other than short-term employee benefits,
post-employment benefits and termination
benefits.

2. Post-employment benefits include

a. Benefits provided in exchange for the termination
of an employee’s employment.
b. Paid annual leave and paid sick leave.
c. Long service leave.
d. Pensions.

3. Which statement is incorrect regarding postemployment

benefit plans?
a. Post-employment benefit plans are arrangements
whereby an entity provides post-employment
benefits.
b. An entity applies PAS 19 to all post-employment
benefit plans whether or not they involve the
establishment of a separate entity to receive
contributions and to pay benefits.
c. Post-employment benefit plans are classified as
either defined contribution plans or defined benefit
plans, depending on the economic substance of the
plan as derived from its principal terms and
conditions.
d. None of the above.

4. Which of the following is a characteristic of a defined

benefit plan?
a. The entity’s legal or constructive obligation is
limited to the amount that it agrees to contribute
to the fund.
b. The amount of the post-employment benefits
received by the employee is determined by the
amount of contributions paid by an entity to a
post-employment benefit plan or to an insurance
company, together with investment returns arising
from the contributions.
c. Actuarial risk (that benefits will be less than
expected) and investment risk (that assets
invested will be insufficient to meet expected
benefits) fall, in substance, on the employee.
d. If actuarial or investment experience are worse
than expected, the entity’s obligation may be
increased.

5. The components of defined benefit cost include

a. Service cost in profit or loss.
b. Interest (net) on the net defined benefit liability
(asset) in profit or loss.
c. Remeasurements of the net defined benefit liability
(asset) in other comprehensive income.
d. All of the above.

6. The deficit or surplus is:

a. The present value, without deducting any plan
assets, of expected future payments required to
settle the obligation resulting from employee
service in the current and prior periods.
b. Assets held by a long-term employee benefit fund
and qualifying insurance policies.
c. The difference between a and b.
d. The total of a and b.

7. An entity shall use the projected unit credit method to

determine the present value of its defined benefit
obligations and the related current service cost and,
where applicable, past service cost. The projected unit
credit method is also known as
a. The accrued benefit method pro-rated on service.
b. The benefit/years of service method.
c. Both a and b.
d. Neither a nor b.

8. The projected unit credit method

a. Sees each period of service as giving rise to an
additional unit of benefit entitlement.
b. Measures each unit of benefit entitlement
separately to build up the final obligation.
c. Both a and b.
d. Neither a nor b.

14. Actuarial gains and losses are changes in the present

value of the defined benefit obligation resulting from:
a. Experience adjustments (the effects of differences
between the previous actuarial assumptions and
what has actually occurred).
b. The effects of changes in actuarial assumptions.
c. Both a and b
d. Neither a nor b

17. Remeasurements of the net defined benefit liability

(asset) exclude
a. Actuarial gains and losses.
b. The return on plan assets excluding amounts
included in net interest on the net defined benefit
liability (asset).
c. Any change in the effect of the asset ceiling,
excluding amounts included in net interest on the
net defined benefit liability (asset).
d. The difference between the present value of the
defined benefit obligation being settled, as
determined on the date of settlement and the
settlement price, including any plan assets
transferred and any payments made directly by the
entity in connection with the settlement

19. Past service cost arises from

a. A plan amendment (the introduction or withdrawal
of, or changes to, a defined benefit plan)
b. A curtailment (a significant reduction by the entity
in the number of employees covered by a plan)
c. Either a or b
d. Neither a nor b

21. In accordance with the revised PAS 19, the asset

ceiling includes?
a. Unrecognized actuarial losses
b. Unrecognized past service cost
c. Present value of any economic benefits available in
the form of refunds from the plan or reductions in
future contributions to the plan.
d. All of the above.

30. PAS 19 specifies

a. That an entity should distinguish between current
and non-current portions of assets and liabilities
arising from post-employment benefits.
b. How an entity should present service cost and net
interest on the net defined benefit liability (asset).
c. Both a and b.
d. Neither a nor b.

31. An entity shall disclose information that:

a. Explains the characteristics of its defined benefit
plans and risks associated with them.
b. Identifies and explains the amounts in its financial
statements arising from its defined benefit plans.
c. Describes how its defined benefit plans may affect
the amount, timing and uncertainty of the entity’s
future cash flows.
d. All of the above.

32. Which statement is incorrect regarding short-term

employee benefits?
a. Employee benefits that are expected to be settled
wholly before twelve months after the end of the
annual reporting period in which the employees
render the related service.
b. Short-term employee benefits in the form of
accumulating paid absences are recognized when
the employees render service that increases their
entitlement to future paid absences.
c. An entity shall measure the expected cost of
accumulating paid absences as the additional
amount that the entity expects to pay as a result
of the unused entitlement that has accumulated at
the end of the reporting period.
d. PAS 19 requires disclosures about short-term
employee benefits for key management personnel.

35. PAS 19 requires a simplified method of accounting for

other long-term employee benefits that is the same as
the accounting for post-employment benefits, except
for
a. Current service
b. Past service cost
c. Net interest
d. Remeasurements

37. Termination benefits are employee benefits provided in

exchange for the termination of an employee’s
employment as a result of:
a. An entity’s decision to terminate an employee’s
employment before the normal retirement date.
b. An employee’s decision to accept an offer of
benefits in exchange for the termination of
employment.
c. Either a or b
d. Neither a nor b

38. An entity shall recognize a liability and expense for

termination benefits
a. When the entity can no longer withdraw the offer
of those benefits.
b. When the entity recognizes costs for a
restructuring that is within the scope of PAS 37
and involves the payment of termination benefits.
c. At the earlier of a and b.
d. At the later of a and b.

39. For termination benefits payable as a result of an

employee’s decision to accept an offer of benefits in
exchange for the termination of employment, the time
when an entity can no longer withdraw the offer of
termination benefits:
a. When the employee accepts the offer.
b. When a restriction (eg a legal, regulatory or
contractual requirement or other restriction) on the
entity’s ability to withdraw the offer takes effect.
c. At the earlier of a and b.
d. At the later of a and b.

42. How shall an entity measure and recognize subsequent

changes in termination benefits?
a. If the termination benefits are an enhancement to
post-employment benefits, the entity shall apply
the requirements for post-employment benefits.
b. If the termination benefits are expected to be
settled wholly before twelve months after the end
of the annual reporting period in which the
termination benefit is recognized, the entity shall
apply the requirements for short-term employee
benefits.
c. If the termination benefits are not expected to be
settled wholly before twelve months after the end
of the annual reporting period, the entity shall
apply the requirements for other long-term
employee benefits.
d. All of the above.

43. PAS 19 specifies required disclosures for

a. Termination benefits
b. Other long-term employee benefits
c. Post-employment benefits
d. All of the above

1. The objective of PAS 19 is to prescribe the accounting

and disclosure for employee benefits. The Standard
requires an entity to recognize:
a. A liability when an employee has provided service
in exchange for employee benefits to be paid in the
future.
b. An expense when the entity consumes the
economic benefit arising from service provided by
an employee in exchange for employee benefits.
c. Both a and b
d. Neither a nor b

2. Which statement is incorrect regarding employee

benefits?
a. Employee benefits are all forms of consideration
given by an entity in exchange for service rendered
by employees or for the termination of
employment.
b. Employee benefits include benefits provided either
to employees or to their dependants or
beneficiaries
c. Employee benefits may be settled by payments (or
the provision of goods or services) made either
directly to the employees, to their spouses,
children or other dependants or to others, such as
insurance companies.
d. For the purpose of PAS 19, employees do not
include directors and other management
personnel.

3. Other long-term employee benefits do not include

a. Long-term paid absences such as long-service
leave or sabbatical leave
b. Jubilee or other long-service benefits
c. Long-term disability benefits
d. Termination benefits

4. If a pension plan is non-contributory, who makes the

contributions?
a. Both the employer and employee
b. Only the employee
c. Only the employer
d. No one

5. Which of the following fall, in substance, on the

employee under a defined contribution plan?
a. Actuarial risk (that benefits will be less than
expected).
b. Investment risk (that assets invested will be
insufficient to meet expected benefits).
c. Both a and b.
d. Neither a nor b.

6. The relationship between the amount funded and the

amount reported for pension expense in a defined
benefit plan is as follows:
a. Pension expense must equal the amount funded.
b. Pension expense will be less than the amount
funded.
c. Pension expense will be more than the amount
funded.
d. Pension expense may be greater than, equal to, or
less than the amount funded.

13. A pension liability is reported when

a. The defined benefit obligation exceeds the fair
value of pension plan assets.
b. The accumulated benefit obligation is less than the
fair value of pension plan assets.
c. The pension expense reported for the period is
greater than the funding amount for the same
period.
d. Accumulated other comprehensive income exceeds
the fair value of pension plan assets.

15. A liability for compensated absences, for which it is

expected that employees will be paid, should
a. Be accrued during the period when the
compensated time is expected to be used by
employees.
b. Be accrued during the period following vesting.
c. Be accrued during the period when earned.
d. Not be accrued unless a written contractual
obligation exists.