Which of the Following Is a Characteristic of a Defined-Benefit

question 51

Multiple Choice

Which of the following is a characteristic of a defined-benefit pension plan?

• A) It raises few accounting issues for employers.
• B) Retirement benefits are based on the plan benefit formula.
• C) It is simple to construct.
• D) Retirement benefits are contingent on how much an employee has accumulated in a retirement account.

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Definitions:

Accounts Receivable Period

The mean duration that a company takes to collect payments from its customers for products or services provided on credit.

Cash Collection Period

The average period of time between when a sale is made on credit and when the payment is received.

Bank Deposit

Funds placed into a banking institution for safekeeping, which can include savings accounts, checking accounts, and certificates of deposit.

Inventory Cycle

The process or time frame from when inventory is acquired to when it is sold, highlighting inventory management efficiency.