Which of the Following Statements About Retained Earnings Restrictions Is

question 74

Multiple Choice

Which of the following statements about retained earnings restrictions is incorrect?

• A) Many states require a corporation to restrict retained earnings for the cost of treasury stock purchased.
• B) Long-term debt contracts may impose a restriction on retained earnings as a condition for the loan.
• C) The board of directors of a corporation may voluntarily create retained earnings restrictions for specific purposes.
• D) Retained earnings restrictions are generally disclosed through a journal entry on the books of a company.

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