Question

Which of the following is a disadvantage of profit sharing plans? Group of answer choices Employees must trust that management will accurately disclose financial and profit information. Employees are taxed heavily on the income that they generate from profit sharing plans. Employers get little or no rebate on income tax for choosing profit sharing plans. Employees cannot access the funds that they receive from profit sharing plans for up to three years.

Answer 1

The correct answer is letter "A": Employees must trust that management will accurately disclose financial and profit information.

Step-by-step explanation:

Profit-sharing plans are retirement plans that allow only employers to make contributions to the plan. Those contributions are allocated according to the profits the company earns by quarter or year. The firm creates a calculation method to determined what amount is going to be provided to each employee. Then, workers rely on the company's integrity to disclose the true amount of revenue it generated over the past period, and according to it allocate compensations for workers responsibly.