Appropriation for retained earnings

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 earnings

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