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Which of the following statements regarding profit-sharing plans is false?
A. A profit-sharing plan must stipulate a minimum employer contribution that will be made, even in less profitable years.
B. The employer can deduct contributions made to a profit-saving plan, within specific guidelines.
C. Employees are not permitted to make contributions of their own to a profit-sharing plan.
D. The withdrawals made by an employee from a profit-sharing plan are taxable as ordinary income.
Answer: A
Explanation:
Explanation/Reference:
Explanation: The false statement is that a profit-sharing plan must stipulate a minimum employer contribution that will be made, even in less profitable years. Under a profit -sharing plan, the employer need make no contribution whatsoever if the firm has had a bad year.
NEW QUESTION: 2
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Answer: B
Explanation:
Explanation
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