Which of the Following Statements Is TRUE

question 81

Multiple Choice

Which of the following statements is TRUE?

• A) Appropriations of retained earnings require journal entries, but restrictions on retained earnings do not.
• B) No journal entries are needed to either appropriate or restrict retained earnings.
• C) Both appropriations and restrictions of retained earnings require journal entries.
• D) Restrictions on retained earnings must be journalized, but appropriations do not need to be journalized.

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Definitions:

Allocative Efficiency

The state of resource allocation where goods and services are distributed according to consumer preferences and utility maximization.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive.

Consumer Surplus

The gap between the amount consumers are prepared to spend on a product or service and the actual price they pay for it.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay.