What Differentiates 401(k) and a 403(b) Retirement Plans

question 22

Multiple Choice

What differentiates 401(k) and a 403(b) retirement plans?

• A) 403(b) plans are subject to all payroll taxes.
• B) 403(b) plans are offered by non-profit employers.
• C) 401(k) plans are limited to companies with more than 100 employees.
• D) 401(k) plans may not be invested in stock-market funds.

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Definitions:

Allowance for Doubtful Accounts

An accounting provision representing the estimate of uncollectable accounts receivable.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time.

Accounts Receivable Turnover

The relationship between net sales and accounts receivable, computed by dividing the net sales by the average net accounts receivable; measures how frequently during the year the accounts receivable are being converted to cash.

Receivable

An amount of money owed to a firm by its customers as a result of the firm extending credit to them.