Which of the Following Statements Holds True for Profit Sharing

question 39

Multiple Choice

Which of the following statements holds true for profit sharing?

• A) This plan generally works well for slow-growing organizations.
• B) Some workers prefer this plan since profits are normally predictable.
• C) Employees must wait for their reward, and this lengthy delay diminishes its impact.
• D) Profits are directly related to an employee's effort on the job.

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Definitions:

Sales Returns

Transactions where customers return previously purchased merchandise, leading to a reduction in sales revenue.

Receivable from Factor

Funds to be received from a factor, a financial intermediary that purchases receivables from a company, providing it with immediate cash.

Factoring Expense

Costs associated with the process of selling accounts receivable to a third party to obtain immediate cash.

Financing Agreement

A legal contract between a borrower and a lender, outlining the terms for borrowing funds, including the interest rate, repayment schedule, and other conditions.