When Making a Transfer from a General Reserve to Retained

question 1

Multiple Choice

When making a transfer from a general reserve to retained earnings,which of the following journals could be used?

• A)DR General Reserve CR Retained earnings
• B)DR General Reserve CR Transfer to general reserve
• C)DR Retained earnings CR General Reserve
• D)DR Transfer to general reserve CR General Reserve

---

Definitions:

Stock Price

The cost of purchasing a share of a company in the stock market, subject to fluctuations based on supply and demand.

Operating Risk

The risk of loss arising from the day-to-day operations of a business.

Cost Of Capital

A measure of the return required by investors to compensate them for the risk of investing in a company.

Capital Components

The different sources of capital, including debt, equity, and any other forms of financing a company uses to fund its operations and growth.