Ross Works for Houston Corporation,which Has a Contributory Defined Contribution

question 22

Multiple Choice

Ross works for Houston Corporation,which has a contributory defined contribution pension plan.The employer's monthly contribution to the plan is 8 percent of each participating employee's monthly salary,while the employee contributes only 6 percent.Which of the following statements best describes the benefits of the plan?

• A)Houston receives a deduction for its contributions to the plan when Ross receives a distribution from the plan.
• B)While Ross is taxed on the employer's contributions to the plan,his own contributions are not taxed until he receives a distribution from the plan.
• C)Ross may deduct his own contributions to the pension plan,and Ross reports income from the plan each year until he receives distributions from the plan.
• D)The amounts contributed to the plan and the earnings on those contributions are not taxed to Ross until he retires or receives a distribution from the plan.

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Definitions:

Manufacturing Jobs

Positions involved in the creation of products from raw materials or components, using various processes, tools, and machinery.

Centralized Decision-making

A decision-making process where major decisions are made by a small group of people or a single individual at the top of the organizational hierarchy.

Time-and-motion Studies

A business efficiency technique combining the timing of work tasks with a study of the motions required to perform them, used to increase productivity.

Industrial Engineering

An engineering discipline focusing on optimizing complex processes, systems, or organizations by eliminating waste and improving efficiency.