Both Employers and Employees May Contribute to Defined Contribution Plans

question 51

True/False

Both employers and employees may contribute to defined contribution plans. However, the amount that employees may contribute to the plan in a given year is limited by the tax law while the amount that employers may contribute is not.

---

Definitions:

Direct Method

A way of preparing the cash flow statement where actual cash receipts and payments are reported, rather than adjusting net income.

Net Cash Flow

The difference between a company's cash inflows and outflows in a given period.

Operating Activities

Activities that relate directly to the primary revenue-producing operations of an organization, such as sales and service delivery.

Fixed Asset

Long-term tangible property that a company owns and uses in its operations to generate income, such as buildings, machinery, and equipment.