What Type of Profit-Sharing Plan Involves the Firm Simply Distributing

question 68

Multiple Choice

What type of profit-sharing plan involves the firm simply distributing a percentage of profits as profit shares to employees at regular intervals?

• A)cash plan
• B)Lincoln incentive system
• C)Jefferson incentive system
• D)deferred profit-sharing plan
• E)employee stock ownership plan

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Definitions:

Unrealized Profits

Profits that have occurred on paper due to an asset's increased value but have not yet been cashed in by selling the asset.

Realized Profits

Refers to the gains earned and received from the sale of assets or investments, distinguished from those merely existing on paper.

Intercompany Sales

Transactions involving goods or services exchanged between subsidiaries within the same corporation, often used for internal accounting and tax purposes.

Unrealized Profits

Gains on investments or assets that have increased in value but have not yet been sold or cashed in.