A Defined Contribution Pension Plan Is One in Which the Employer

question 44

Multiple Choice

A defined contribution pension plan is one in which the employer agrees to which of the following?

• A)The employer agrees to make payments to a specified pension plan with no guarantee of a specific pension amount to be paid to the employee.
• B)The employer agrees to make actuarially determined payments to a pension plan AND guarantees that the employee will receive a specified pension benefit usually determined by length of service and salary.
• C)The employer agrees to make actuarially determined payments to a pension plan that guarantees that the employee will receive a specified pension usually determined by length of service and salary.
• D)The employer agrees to pay specified amounts usually determined by length of service and salary to the employee upon retirement.

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Definitions:

Net Income

The remaining income of a company once all taxes and costs are deducted from its total revenue.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, representing the wear and tear, or obsolescence of the asset.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments are made for expenses and revenues at the end of an accounting period.

Unadjusted Trial Balance

A listing of all accounts in the general ledger before any adjustments are made for the end of the reporting period.