Placing a restriction on retained earnings will
A)ensure that the corporation has sufficient cash for a specific purpose.
B)increase total shareholders' equity.
C)inform readers that a portion of retained earnings is unavailable for dividends.
D)decrease shareholders' equity.

Question

Quizplus · Accepted Answer

Restricting retained earnings informs readers that a portion of those earnings is unavailable for dividends, indicating that the company has earmarked these funds for specific uses other than distribution to shareholders.

Placing a Restriction on Retained Earnings Will