A Defined Contribution Plan Pays a Benefit Based on a Formula

question 36

True/False

A defined contribution plan pays a benefit based on a formula made up of age and length or service.

---

Definitions:

Partial Equity Method

An accounting method used when an investing entity holds significant influence but not full control over an investee, and recognizes its share of profits or losses.

Initial Value Method

An accounting approach where investments are recorded at their purchase cost without subsequent adjustment for market changes.

Consolidated Net Income

The total net income of a parent company and its subsidiaries, after eliminating the effects of intercompany transactions.

Investment Account

An account held at a financial institution that holds securities, stocks, bonds, and other investment assets.