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.

Calculate the financial impact of changing exchange rates on investments and savings.

Solve problems related to the appreciation and depreciation of currencies.

Evaluate the cost-effectiveness of purchasing international goods and services.

Understand the impact of service charges on currency exchanges.

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Definitions:

Doubled

A term indicating that a quantity, value, or size has increased by 100 percent, resulting in its multiplication by two.

Stayed The Same

A condition where no change or variation has occurred over a specified period.

Quantity Theory

An economic theory that proposes a direct relationship between the quantity of money in an economy and the level of prices of goods and services.

Doubled

Refers to an increase by 100% or a situation where a quantity has become twice as large.