Which of the following is not true regarding reserves that appear in the equity section of the balance sheet of foreign companies?
A) Reserves represent cash set aside to fund capital projects.
B) Reserves are different categories found in the equity section of the balance sheet.
C) The balances in reserve accounts can affect an entity's legal ability to pay cash dividends.
D) An extensive description of each reserve shown on the balance sheet is provided.

Question

Quizplus · Accepted Answer

Reserves in the equity section do not represent cash set aside; they are part of shareholders' equity, reflecting retained earnings or other comprehensive income, not actual cash.

Which of the Following Is Not True Regarding Reserves That