When Retained Earnings Are Restricted, Total Retained Earnings

question 44

Multiple Choice

When retained earnings are restricted, total retained earnings

• A)are unaffected.
• B)increase.
• C)decrease.
• D)may increase or decrease.

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Definitions:

Work in Process Inventory

Goods that are in various stages of the production process but are not yet complete products.

Finished Goods Inventory

Items that are fully manufactured, prepared for sale, and available for customers to buy.

Work in Process Inventory

Items or materials that are partially completed in the production process, representing a company's unfinished goods.

Direct Materials

Raw materials that can be directly identified with the production of finished goods in a manufacturing process.