In a Defined-Contribution Plan

question 67

Multiple Choice

In a defined-contribution plan:

• A) only the employee makes contributions into the fund.
• B) the retirement benefits will vary with both the amount contributed and the performance of the fund.
• C) the benefits are determined mainly by years of service.
• D) no vesting is required; employees are eligible for benefits from the time they make their first contribution.

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Definitions:

Expenses

Costs incurred in the process of earning revenue, which are subtracted from revenues to calculate net income.

Financial Statements

Formal records of the financial activities and position of a business, person, or other entity.

Balance Sheet

A financial statement that provides a snapshot of a company’s financial position, showing assets, liabilities, and shareholders' equity at a specific point in time.

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, indicating the net profit or loss.