Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

12. Stockholders' Equity

Retained Earnings

Financial Accounting

12. Stockholders' Equity

Retained Earnings

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which term refers to retained earnings that are subject to statutory and contractual restrictions?

Paid-in capital

Unappropriated retained earnings

Appropriated retained earnings

Accumulated other comprehensive income

Previous problemNext problem

Verified step by step guidance

Understand the concept of retained earnings: Retained earnings represent the portion of a company's net income that is retained by the company rather than distributed to shareholders as dividends. These earnings can be used for reinvestment in the business or reserved for specific purposes.

Learn about appropriated retained earnings: Appropriated retained earnings are a subset of retained earnings that are set aside for specific purposes due to statutory or contractual restrictions. This appropriation ensures that the funds are not used for other purposes, such as dividend payments.

Differentiate between appropriated and unappropriated retained earnings: Unappropriated retained earnings are the portion of retained earnings that are not restricted and can be freely used by the company for any purpose, including paying dividends or reinvesting in the business.

Understand the role of statutory and contractual restrictions: Statutory restrictions are imposed by law, while contractual restrictions arise from agreements with creditors or other parties. These restrictions may require the company to reserve a portion of its retained earnings for specific uses, leading to the creation of appropriated retained earnings.

Recognize the correct term: Based on the explanation, the term that refers to retained earnings subject to statutory and contractual restrictions is 'Appropriated retained earnings.' This ensures compliance with legal and contractual obligations.