Which of the Following Statements Is True

question 14

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:

Market Forces

The natural effects of supply and demand that determine prices and resource allocation in a market economy.

Collective Decision-Making

The use of the political process (voting, taxes, government spending, regulation, political bargaining, lobbying, and so on) to make decisions and allocate resources. In a democratic setting, the votes of citizens and their representatives will determine the actions undertaken.

Basic Economic Questions

Fundamental questions that every economic system must address: What to produce, how to produce, and for whom to produce.

Private-Property Rights

Legal provisions that allow individuals to own, control, and benefit from property such as land, buildings, or intellectual property.