Which One of These Statements Correctly Applies to a Roth

question 53

Multiple Choice

Which one of these statements correctly applies to a Roth IRA?

• A)Earnings on the account are tax-free after five years.
• B)Annual contributions may exceed $7,000.
• C)Deposits must be in federally-insured accounts.
• D)Funds are only to be used for educational expenses.
• E)Only self-employed workers can contribute to a Roth IRA.

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Definitions:

Account

A record summarizing all transactions related to a particular item or person in financial accounting.

Owner's Equity

The residual interest or ownership claim in a firm's assets after subtracting liabilities, representing what the owners have invested or retained from net income.

Trial Balance

A bookkeeping report that lists the balances of all ledgers in two columns, debits and credits, ensuring they are equal.

Trial Balance

An accounting worksheet that aggregates the balances from all ledgers into debit and credit columns, with the totals of these columns being identical.