Under a Defined Benefit Plan, the Annual Benefit Payable to an Employee

question 76

True/False

Under a defined benefit plan, the annual benefit payable to an employee is limited to the smaller of $215,000 (in 2017) or 100% of the employee's average compensation for the highest 3 years of employment.

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Definitions:

Contra-Asset

An account displayed on the balance sheet that reduces the value of a related asset, such as accumulated depreciation.

Liability

Financial obligations, debts, or responsibilities owed by a business to others, to be settled over time through the transfer of economic benefits.

Invoice Approval Form

Used by the accounting department in checking the invoice and finally approving it for recording and payment.

Purchasing Department

A division within a business that is responsible for acquiring goods and services that are necessary for the company's operations.