A Company That Maintains a SIMPLE-401k) Has the Option of Funding

question 73

Multiple Choice

A company that maintains a SIMPLE-401k) has the option of funding the plan by I. Contributing 2% of an employee's salary up to a maximum of $5,200. II. Match the employee's contribution up to a maximum of 3 percent of the employee's compensation with a maximum contribution of $12,000.

• 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:

Loss Contingencies

Possible financial losses that companies may face as a result of future events that have uncertain outcomes, necessitating disclosure in financial statements if they are both probable and estimable.

Gain Contingencies

Gain contingencies are potential increases in economic benefits to an organization that arise from events whose outcomes or realizations are uncertain until they occur.

Fiscal Year

A one-year period that companies and governments use for financial reporting and budgeting, which does not necessarily align with the calendar year.

Coupons

Debt instruments offering interests or discounts issued by companies to raise capital, or vouchers offering discounts on goods and services.