Final answer:
The financial statements of a defined benefit plan show the actuarial present value of promised retirement benefits, reflecting the employer's obligation, while defined contribution plan financial statements do not, as the benefit amount depends on individual account balances and investment performance. The correct option is d. The financial statements of a defined benefit plan show information on the actuarial present value of promised retirement benefits
Step-by-step explanation:
The main difference between the financial statements of a defined contribution plan and a defined benefit plan is related to the information about the actuarial present value of promised retirement benefits. A defined contribution plan's financial statements include a statement of net assets available for benefits but do not show information on the actuarial present value of promised retirement benefits, as this is not relevant due to the nature of these plans. Instead, the responsibility is on the employee to contribute and manage their investments. On the other hand, defined benefit plan financial statements show information on the actuarial present value of promised retirement benefits since the employer bears the risk, and the benefit amounts are determined by a formula based on factors such as salary history and years of service.
The correct option is d. The financial statements of a defined benefit plan show information on the actuarial present value of promised retirement benefits