Characteristics of Profit- Sharing Plans Include All of the Following

question 131

Multiple Choice

Characteristics of profit- sharing plans include all of the following with the exception of:

• A) A predetermined formula is used to allocate employer contributions to individual employees and to establish benefit payments.
• B) The company must make contributions to the plan if it has profits during the year.
• C) Forfeitures of benefits under the plan may be reallocated to the remaining participants.
• D) Annual employer contributions are not required, but substantial, recurring contributions must be made to satisfy the requirement that the plan be permanent.

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Definitions:

New Firms

Newly established business entities that have recently started operations, contributing to innovation, competition, and economic dynamics.

Existing Firms

Businesses that are already operating within a market, as opposed to new entrants.

Long Run

A period in economics where all factors of production and costs are variable, allowing for complete industry adjustment to changes.

Monopolistic Competition

A market structure where many companies sell products that are similar but not identical, leading to competition based on quality, price, and brand.