Which One of the Following Statements Best Describes Profit Sharing

question 25

Multiple Choice

Which one of the following statements best describes profit sharing?

• A)Profit sharing is an equal division of all revenues among workers.
• B)Profit sharing ties pay to the performance of individuals.
• C)Profit sharing is a program that donates profits to the poor.
• D)Profit sharing provides a system by which workers receive a share of the firm's profits.
• E)Profit sharing discourages free-riding among workers.

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Definitions:

Comprehensive Income

The change in equity of a company during a period from transactions and other events, excluding any changes resulting from investments by and distributions to equity claimholders.

GAAP

Generally Accepted Accounting Principles, a collection of standardized guidelines and practices for financial accounting in the United States to ensure consistency and transparency.

Comparative Financial Statements

These are financial statements that present data for multiple periods side by side to facilitate comparison and analysis of financial performance over time.

Retroactively Adjusted

Adjustments made to financial statements or other data for previous periods in light of new information or to correct errors.