Question

All of the following increase pension expense except:

(a)service cost.
(b)interest on the liability.
(c)amortization of prior service cost.
(d)All of these answers are correct.

Answer 1

The correct answer is (d) All of these answers are correct. All of the options listed (a) service cost, (b) interest on the liability, and (c) amortization of prior service cost, increase pension expense.

Step-by-step explanation:

The correct answer is (d) All of these answers are correct. All of the options listed (a) service cost, (b) interest on the liability, and (c) amortization of prior service cost, increase pension expense. The service cost represents the cost of providing pension benefits to employees based on their years of service. The interest on the liability refers to the interest expense incurred on the pension liability, while the amortization of prior service cost represents the expense associated with recognizing the cost of past service benefit modifications. Therefore, all of these options increase pension expense.