Which Statement Concerning the Reserves Component of Equity Is Not

question 4

Multiple Choice

Which statement concerning the reserves component of equity is not correct?

• A)Reserves represent cash.
• B)Retained profits and reserves are often classified under the general heading of reserves.
• C)The higher the dividend paid by the company, the lower the reserves.
• D)Many reserves arise as transfers from retained profits.

---

Definitions:

Education Level

A measurement of the highest stage or degree of formal learning or training that an individual has completed.

Labor Force

Refers to the total number of people, including both the employed and the unemployed, who are currently available to engage in the production of goods and services in an economy.

Entrepreneurs

Individuals who start, organize, manage, and assume the risk for a business venture.

Risky Activities

Actions or endeavors that involve a significant chance of loss or failure, often assessed in financial, business, or recreational contexts.