Appropriation of retained earnings is necessary when the corporation reacquires its own share capital True or False?
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Appropriation of
True or False?
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- Why would a company repurchase its own stock?Which of the following may not affect retained earnings or earned capital? Correction of prior period errors Gain on reissuance of treasury shares Loss on reissuance of treasury shares Profit or loss for the periodFor fi nancial assets classifi ed as trading securities, how are unrealized gains and lossesrefl ected in shareholders’ equity?A . Th ey are not recognized.
- TRUE OR FALSE 1. Appropriation for retained earnings do not change both on the total amount of shareholder’s equity and total retained earnings. 2. Appropriated Retained Earnings account is created for the purpose of insuring the payment of dividends. 3. Appropriated Retained Earnings does not mean that assets are segregated for a specific purpose. 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 earningsTransaction costs incurred by the corporation relating to issue of shares may not be a. Charged against the related share premium b. Charged to an expense account c. Written off directly against share capital d. Taken to profit or loss8. In the absence of evidence to the contrary, all the retained earnings of an entity can be declared as dividends. In order to limit or restrict the payment of dividends, a corporation makes appropriations of retained earnings. Appropriation for treasury shares is what type of retained earnings appropriation? a. Contractual appropriation b. Voluntary appropriation c. Legal appropriation d. Discretionary appropriation
- Distinguish between paid-in capital and retained earningsof a corporation. Why is such a distinction useful?Which of the following would result from watered shares? overstated capital understated assets overstated liabilities understated liabilitiesWhich of the following best describes the possible result of treasury share transactions? a. May decrease but not increase net income. b. May increase net income if the cost method is used. c. May increase but not decrease retained earnings. d. May decrease but not increase retained earnings.
- retained earnings are not part of the stockholders claims on the company net assets true falseRetained earnings must be appropriated if there are treasury shares due to:A. contractual appropriationB. legal appropriationC. voluntary appropriationD. all of the aboveThe declaration of the dividends by a company has no effect on the retained income of the company, true or false?
