Which of the Following Describes a Defined Benefit Plan

question 77

Multiple Choice

Which of the following describes a defined benefit plan?

• A)Provides fixed income to the plan participants based on a formula.
• B)Distribution amounts determined by employee and employer contributions.
• C)Allows executives to defer income for a period of years.
• D)Retirement account set up by an individual.

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Definitions:

Retained Earnings

The amount of net income left over for the business after it has paid out dividends to its shareholders, often reinvested in the business or used to pay down debt.

Marketable Securities

Financial instruments that can be easily converted into cash, often including stocks, bonds, and other securities traded on public exchanges.

Fair Value

The price that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Bonds Payable

Long-term liabilities representing amounts owed by an entity to bondholders, to be repaid at specified maturity dates with interest.