Which of the Following Statements Regarding Contributions to Defined Contribution

question 56

Multiple Choice

Which of the following statements regarding contributions to defined contribution plans is True?

• A) Employer contributions to a defined contribution plan are not limited by the tax law.
• B) Employee contributions to a defined contribution plan are not limited by the tax law.
• C) An employee who is at least 60 years of age as of the end of the year may contribute more to a defined contribution plan than an employee who has not reached age 60 by year-end.
• D) The tax laws limit the sum of the employer and employee contributions to a defined contribution plan.

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Definitions:

Par Common Stock

The nominal or face value assigned to common stock shares, as stated in the corporate charter.

Total Impact

The overall effect or influence of something, often used to assess the comprehensive outcome of a decision, action, or event.

Cumulative Preferred

A type of preferred stock where dividends accumulate if not paid in a given period and must be paid out before any dividends can be distributed to common stockholders.

Dividends in Arrears

Dividends owed on cumulative preferred stock that require payment prior to distributing any dividends to holders of common stock.