Answered: Appropriation for retained earning

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Statement 1: Appropriation for retained earnings do not change both on the total amount of shareholder’s equity and total retained earnings.
Statement 2: Appropriated Retained Earnings account is created for the purpose of insuring the payment of dividends.
Statement 3: Appropriated Retained Earnings does not mean that assets are segregated for a specific purpose.
Statement 4: The only proper way to eliminate an appropriation of retained earnings after it has served its purpose is to reclassify/revert to the unappropriated retained earnings.

All statements are correct

Only two (2) of the statements are correct

Only one (1) of the statements are correct

All statements are incorrect

Only three (3) of the statements are correct

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