A Resolution by the Board of Directors to Set Aside

question 82

Multiple Choice

A resolution by the board of directors to set aside a part of the credit balance of the retained earnings account for a specific use is called

• A) earnings retained in the business.
• B) an appropriation.
• C) a recapitalization.
• D) a deficit.

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Definitions:

Work In Process Inventory

Goods that are in the process of being manufactured but are not yet completed, representing a component of a company's inventory.

Finished Goods Inventory

Items that have been completed by the manufacturing process and are ready for sale to customers.

Control Accounts

General ledger accounts that summarize the balances of a group of subsidiary accounts, facilitating the organization and verification of financial information.

Costing System

A method used by businesses to determine the cost associated with producing a product or offering a service, taking into account factors like materials, labor, and overhead.