Which of the Following Statements About the General Reserve Account

question 33

Multiple Choice

Which of the following statements about the general reserve account is NOT true?

• A) A transfer to this account may be used to indicate to shareholders that it is unlikely to be paid out in dividends.
• B) Amounts can be transferred back from it to retained profits.
• C) The general reserve account provides an indication of where funds are invested.
• D) The general reserve account appears under shareholders' equity in the balance sheet.

---

Definitions:

Maximizing Profits

The process or strategy employed by businesses to achieve the highest possible profit margins by optimizing production, sales, and pricing.

Payment to Labor

The compensation that workers receive in exchange for their labor, typically in the form of wages or salaries.

Derived Demand

The demand for one good or service that occurs as a result of the demand for another good or service, often because the goods are related as inputs to the production of another good or service.

Auto Workers

Individuals employed in the automobile industry, typically involved in the manufacturing, assembly, or design of vehicles.