If the Board of Directors Authorizes a $100,000 Restriction of Retained

question 166

Multiple Choice

If the board of directors authorizes a $100,000 restriction of retained earnings for a future plant expansion, the effect of this action is to

• A) decrease total assets and total stockholders' equity.
• B) increase stockholders' equity and decrease total liabilities.
• C) decrease total retained earnings and increase total liabilities.
• D) reduce the amount of retained earnings available for dividend declarations.

---

Definitions:

Subalpine Forest

Forest ecosystems found just below the alpine timberline, characterized by cold climates and a dominance of coniferous trees.

Debt-For-Nature Swaps

Financial transactions in which a portion of a developing country's foreign debt is forgiven in exchange for local investments in environmental conservation projects.

Secondary Succession

The ecological recovery process that occurs in an area where the natural vegetation has been removed or destroyed but the soil remains intact.

Large-Scale Ranching

An extensive form of agriculture operation where livestock such as cattle, sheep, or horses are raised on large tracts of land.