If the Proceeds of a Pension Plan Are Being Distributed

question 38

Multiple Choice

If the proceeds of a pension plan are being distributed and the original beneficiary dies:

• A)The person who inherits the plan assets can elect to be treated as the original beneficiary if that person is the spouse of the original beneficiary.
• B)The person who inherits the plan assets can elect to be treated as the original beneficiary if that person is unrelated to the original beneficiary.
• C)The person who inherits the plan assets will receive the remaining plan assets tax-free.
• D)The balance of the pension plan assets must be distributed in the year of death.

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Definitions:

Journalizing Transactions

The process of recording business transactions in the journal as part of the accounting process.

Correcting Entries

Journal entries made to correct errors found in the financial statements.

Adjusting Entries

Journal entries made in accounting to record revenues earned and expenses incurred that are not yet recorded through standard accounting transactions.

Closing Entries

Entries recorded at the accounting period's close to shift balances from temporary to permanent accounts.