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Amortizing a net loss for pensions and other postretirement benefit plans will:

a) increase retained earnings and increase accumulated other comprehensive income.
b) decrease retained earnings and decrease accumulated other comprehensive income.
c) increase retained earnings and decrease accumulated other comprehensive income.
d) decrease retained earnings and increase accumulated other comprehensive income.

User Max Truxa
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Final answer:

Amortizing a net loss for pensions and postretirement benefit plans will option d. decrease retained earnings and increase accumulated other comprehensive income, as the losses move from AOCI to the income statement.

Step-by-step explanation:

Amortizing a net loss for pensions and other postretirement benefit plans will decrease retained earnings and increase accumulated other comprehensive income (AOCI). When losses from these plans are amortized, they are moved from AOCI and recognized in the income statement, which lowers retained earnings. However, as this amortization removes losses from the AOCI, the balance in AOCI increases, as it typically records amounts not yet recognized in profit and loss. This process is part of pension accounting under U.S. GAAP.

User Idan K
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