Problem Solving Survival Guide to accompany Financial Accounting, 8th Edition

EXERCISE G-4

Purpose: (L.O. 1 thru 3) This exercise will quiz you about terminology used in this appendix.

A list of accounting terms with which you should be familiar appears below:

Capital lease	Operating lease
Contingent liability	Pension plan
Defined-benefit plan	Postretirement benefits
Defined-contribution plan

Instructions

For each item below, enter in the blank the term that is described.

1. ___________________________________ A potential liability that may become an actual liability in the future.
2. ___________________________________ A contractual arrangement giving the lessee temporary use of the property with continued ownership of the property by the lessor.
3. ___________________________________ A contractual arrangement that transfers substantially all the benefits and risks of ownership to the lessee so that the lease is in effect a purchase of the property.
4. ___________________________________ Payments by employers to retired employees for health care, life insurance, and pensions.
5. ___________________________________ An agreement whereby an employer provides benefits to employees after they retire.
6. ___________________________________ A pension plan in which the employer's contribution to the plan is defined by the terms of the plan.
7. ___________________________________ A pension plan in which the benefits that the employee will receive at retirement are defined by the terms of the plan.