Which of the Following Statements with Regard to SEP Plans

question 23

Multiple Choice

Which of the following statements with regard to SEP plans is not true?

• A) Self-employed individuals can contribute up to 25% of annual net income.
• B) They are also called Keogh plans.
• C) The maximum contribution in 2018 is $55,000.
• D) A SEP is a defined-contribution plan.

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Definitions:

Prepaid Expenses

Payments made in advance for goods or services to be received in the future, recorded as assets on the balance sheet until they are consumed or used.

Indirect Method

A method of presenting the operating activities section of the statement of cash flows that adjusts net income to compute cash flows from operating activities.

Net Income

The net income of a company, which is the remaining amount of total revenue after deducting all expenses and taxes.

Inventory

The total amount of goods and materials held by a company intended for sale or production.