Which of the Following Statements Is TRUE

question 226

Multiple Choice

Which of the following statements is TRUE?

• A) Appropriations of retained earnings require journal entries, but restrictions on retained earnings are usually reported in notes to the financial statements.
• B) No journal entries are needed to 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 are usually reported in notes to the financial statements.

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Definitions:

Stock Market Crash

A stock market crash is a rapid and often unanticipated decline in stock prices across a significant cross-section of a stock market, resulting in a loss of paper wealth.

Intrinsic Value

The inherent worth of something based on its qualities and utility, independent of external factors like market conditions.

Private Placement Situation

A method of raising capital through the sale of securities to a relatively small number of select investors rather than through a public offering.

SEC

Securities and Exchange Commission, a U.S. government agency that oversees securities transactions, activities of financial professionals, and the stock and options exchanges.