Which of the Following Is Not True Regarding Reserves That

question 39

Multiple Choice

Which of the following is not true regarding reserves that appear in the equity section of the balance sheet of foreign companies?

• A) Reserves represent cash set aside to fund capital projects.
• B) Reserves are different categories found in the equity section of the balance sheet.
• C) The balances in reserve accounts can affect an entity's legal ability to pay cash dividends.
• D) An extensive description of each reserve shown on the balance sheet is provided.

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Definitions:

Plaintiff's Claim

A plaintiff's claim is a formal accusation or allegation made in a court by the plaintiff, starting legal proceedings against the defendant.

Tort

A legal wrong or infringement of a right leading to civil legal liability.

Nuisance

An act, condition, or thing that is considered an inconvenience or annoyance, and can sometimes give rise to a legal claim.

Bank's Carelessness

Negligent or inattentive actions by a banking institution that lead to loss or damage for a customer.