medium · Financial Accounting stockholders-equity

Which of the following describes the 'Service Cost' component of the Net Periodic Pension Cost?

1. The actual cash contributions made by the plan sponsor employer directly into the pension plan trust fund each year.
2. The increase in the projected benefit obligation resulting solely from the passage of time during the year, akin to accrued interest.
3. The actuarial present value of benefits attributed by the pension benefit formula to employee service during the current period.
4. The total amount of benefits paid out in cash to retirees and other beneficiaries during the current fiscal reporting period under the plan.

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