Deferred Distribution Plans

question 39

Multiple Choice

Deferred distribution plans:

• A) are types of gain-sharing plans
• B) are devised to relate long-term profitability to top management performance
• C) place earnings in an escrow account for distribution upon retirement, termination, disability, or death
• D) are not as popular as current distribution plans because they lack immediacy
• E) are accurately described by all of the above

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Definitions:

Contributed Services

Services provided by volunteers or donated resources that are typically not paid for but are recorded in the financial statements if they create or enhance a nonfinancial asset or require specialized skills.

Permanent Endowment

A donation of money or property to a nonprofit organization, which uses the resulting investment income for a specific purpose.