Under a Qualified Pension Plan

question 78

Multiple Choice

Under a qualified pension plan
I.The yearly earnings on the pension plan assets are taxable income to the employee.
II.An employer's contribution is not taxable income to the employee at the time of the contribution.
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• A)Only I is correct.
• B)Only II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Quick Ratio

An indicator of a firm's capacity to fulfill its immediate liabilities using its most easily convertible assets.

Debt-Equity Ratio

A measure of a company's financial leverage, calculated by dividing its total liabilities by its shareholder equity, indicating the extent to which it is financing its operations through debt.

Current Ratio

A liquidity ratio that measures a company's ability to cover its short-term liabilities with its short-term assets.

Interest Expense

The cost incurred by an entity for borrowed funds over a period.