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:

FCFE

Available Cash for Equity Shareholders, an indicator of the cash surplus for a company's equity shareholders after settling all costs, reinvestments, and liabilities.

Per Share FCFE

Free Cash Flow to Equity per share, indicating the amount of cash available to equity shareholders per share after expenses, reinvestment, and debt payments.

Required Rate of Return

The minimum annual percentage return on an investment deemed acceptable by an investor or creditor.

Per Share FCFE

Free Cash Flow to Equity per share; a measure of how much cash is available to the equity shareholders of a company on a per share basis.