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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Definitions:

Line Voltage

The voltage measured across any two phase wires in a multi-phase electrical system.

Wye-Connected

A method of connecting three-phase motors and generators where the end of each of the three coils is connected to form a 'Y' shape, also known as a star connection.

Line Voltage

The voltage present in the electrical power transmission lines available for end users or machinery.

Phase Voltage

The voltage measured in a single phase of a multi-phase system, often used in the analysis of electrical power distribution.