QVT Financial, an Auditing Firm, Distributes a Portion of the Profits

question 74

Multiple Choice

QVT Financial, an auditing firm, distributes a portion of the profits resulting from improvements in productivity and efficiency among its employees. If the company enjoys an improvement of $45,000, 60 percent of the improvement is the company's share. The other 40 percent is distributed among the employees in the company. What is being exemplified in this scenario?

• A) profit rate
• B) gainsharing
• C) commission sharing
• D) merit gain
• E) group bonus

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Definitions:

Dividends

Corporate profits that are allocated and paid out to individuals owning stock in the company, effectively sharing a part of the earnings with shareholders.

Cumulative Voting

Procedure where a shareholder may cast all votes for one member of the board of directors.

Board Of Directors

A group of individuals elected by shareholders to oversee the management and make major decisions for a corporation.

Shares Of Stock

Units of ownership interest in a corporation that give the owner a share in the company's profits and voting rights.