Which of the Following Statements Is Correct Regarding Limitations on Employer's

question 100

Multiple Choice

Which of the following statements is correct regarding limitations on employer's contributions to qualified retirement plans in 2019?

• A)Defined benefit plans are limited to an annual benefit to an employee of the lesser of $56,000 or 100% of the employee's average compensation for the highest three years.
• B)Defined contribution plan contributions are limited to the lesser of $225,000 or 25% of an employee's compensation.
• C)Defined contribution plan contributions are limited to the lesser of $56,000 or 100% of an employee's compensation.
• D)If an employer has more than one type of qualified plan,a maximum deduction of 100% of compensation is allowed.

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Definitions:

Retail Inventory Method

An accounting method used to estimate inventory value by calculating the cost to retail price ratio.

Cost To Retail Ratio

A method used in retail to calculate inventory value by comparing the cost of goods to their retail price.

Ending Inventory

Ending inventory is the value of goods available for sale at the end of an accounting period, calculated as the beginning inventory plus purchases minus the cost of goods sold.

Gross Profit Method

An accounting technique used to estimate inventory levels and cost of goods sold by utilizing the gross profit margin.