If a Sinking Fund Is Required by Creditors or Law

question 136

True/False

If a sinking fund is required by creditors or law, the unexpended resources would be classified as Restricted Fund Balance.

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Definitions:

Shares Outstanding

The total number of a company's shares of stock that are owned by shareholders, including both public investors and corporate insiders.

Retained Earnings

Retained earnings are the cumulative amount of net income left over for a company after it has paid out dividends to its shareholders, reinvested in the business, or used to pay off debt.

Treasury Stock

Shares that were issued and later reacquired by the corporation, reducing the number of outstanding shares in the market.