The Part of Shareholders' Equity That May Not Be Used

question 34

Multiple Choice

The part of shareholders' equity that may not be used to pay cash dividends is:

• A)retained profits.
• B)share capital.
• C)revenue reserves.
• D)Both A and B

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Definitions:

Materiality

An accounting and auditing principle referring to the significance of transactions or information that could influence the decision-making of users of financial statements.

Financial Information

Data about a company's financial activities, including income, expenses, assets, liabilities, and equity, used by stakeholders to make informed decisions.

Omission

The act of leaving out or neglecting to include or do something, often resulting in incomplete information or tasks.

Qualitative Characteristics

Attributes that make the information provided in financial statements useful to users, such as relevance and reliability.