Q20) Which of the following statements is not correct? A. Profit-sharing plans fall under the broad category of defined contribution plans B. Profit-sharing plans are best suited for companies with unstable earnings. C. A company which adopts a profit-sharing plan is required to make contributions each year. D. Profit-sharing schemes can be either a flat percentage of profits or a percentage of profits in excess of a minimum amount.
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Profit-sharing plans are indeed a type of defined contribution plan, where the employer's contribution is based on the company's profits. Statement D is also correct. The structure of profit-sharing plans can vary, and they can be based on a flat percentage of Show more…
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