Question

Each year total pension liability increases as employees complete an additional year and add to their future benefits. This increase is termed ____ ____.

Answer 1

Accrued liability is the increase in total pension liability each year as employees gain an additional year of service and add to their future benefits.

Step-by-step explanation:

The increase in total pension liability each year, as employees gain an additional year of service and add to their future benefits, is known as accrued liability. Accrued liability is the cumulative amount of pension benefits that have been earned by employees but not yet paid out. It represents the future obligations that the employer has to its employees for their service.

For example, if an employee is entitled to receive a pension that increases by $1,000 for each year of service, the accrued liability will increase by $1,000 for each year the employee works.