What is a Profit-Sharing Plan? - Definition, Rules & Example

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

Employers typically establish profit sharing plans to _____.

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1. The document that summarizes what's stated in a profit sharing plan's Adoption Agreement and explains the rules that guide the plan is called the _____.

2. Jon's compensation is $30,000. As of 2014, what is the maximum his employer can deposit for his profit sharing?

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About This Quiz & Worksheet

This multiple choice assessment tests your knowledge of how various profit sharing plans are set up. Key topics to focus on for a successful quiz are maximum employer deposits and qualifying events.

Quiz & Worksheet Goals

Use these assessment tools to assess your knowledge of:

  • Profit sharing plans
  • The adoption agreement
  • Vesting schedules

Skills Practiced

  • Critical thinking - apply your understanding to think about contracts in a different way
  • Information recall - access the knowledge you've gained regarding contracts
  • Knowledge application - use your knowledge gained from the examples to answer questions about profit-sharing plans

Additional Learning

To learn more about profit sharing plans, review the accompanying lesson titled Characteristics of Profit Sharing Plans. This lesson will help you:

  • List events that enable withdrawals from profit sharing accounts
  • Understand the nuances of rules and contracts
  • Define the document that explains the rules of the plan
  • Identify profit sharing use
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