In General, Which of the Following Statements Regarding Self-Employed Retirement

question 147

Multiple Choice

In general, which of the following statements regarding self-employed retirement accounts is true?

• A)In general, SEP IRAs have higher contribution limits than individual 401(k)s if the contributing taxpayer is at least 50 years of age at year-end.
• B)In general, SEP IRAs have higher contribution limits than individual 401(k)s no matter the age of the contributing taxpayer.
• C)In general, individual 401(k)s have higher contribution limits than SEP IRAs.
• D)None of the choices are true. In general, both SEP IRAs and individual 401(k)s have exactly the same annual contribution limits.

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Definitions:

Bank Reconciliation

The process of matching and comparing figures from accounting records against those presented on a bank statement to ensure consistency and accuracy.

Deposit In Transit

Funds that have been received and recorded by a company but not yet reflected in the bank's records.

NSF Notation

An abbreviation for "Non-Sufficient Funds," used by banks to indicate that a check cannot be honored because the account holder's account lacks the funds to cover it.

Sales Returns And Allowances

Accounts used to record reductions in revenue from previously recorded sales due to product returns or concessions granted to customers for damaged or unsatisfactory goods.