if-a-companys-board-of-directors-designates-a-portion-of-earnings-for-a-particular-purpose-due-to-le

Question

If a company’s board of directors designates a portion of earnings for a particular purpose due to
legal or contractual obligations, they are designated as ________.
A. retained earnings payable
B. appropriated retained earnings
C. cumulative retained earnings
D. restricted retained earnings

Puneet Prajapati · Accepted Answer

Okay, so we are going to understand the concept off outstanding expenses. Okay? No. What about the UPS turning expenses. We will first. Right? Our technical jim ordered by that we will have our example who make the decoration is the mold. It is the a mode for which the best the business entropy uh, yeah is a very has a really services for the business. Entity has a very self icis general delivery, like such a moment is yet me big. Okay, so this is this is this is the most important part off the definition as well as the content. And we would understand she your definition Hold exam. So let&#x27;s is you. That date is up going green. Okay. I v c don&#x27;t me no water. What? It did that. It&#x27;s mostly opening. Sorry. It&#x27;s mostly operates on telephone services. Okay, so these telephone services I&#x27;ve provided by Mr Beef Okay, who is this service provided? Now what happens? I basically me has a very the services ornament, general, but service charges? Yeah, not being yet. Okay, So what? We have another example that we have i d c company that mostly operates, begins the most independent from eloquent services. Bitch. I provided by Mr B. Okay, Now I physical. He has a very revolt services off month of gentry. But this service, its service charges have not being baby yet. Okay, Now, in order to a phone for such expenses what, you will have vehicle record. Lexus opposed the building off generally month. Was it out? I wondered. Notice. Okay, so these $500 will be recorded as outstanding expenses. Okay, so $500 will be recorded as off standing expenses in the current financial year. Yeah, you contracted it. So $500 will be the mechanized death. Outstanding expenses in the current financial year. However, whenever these $500 will be here, that&#x27;s a supposing financial year two. Then we will recognize them as expenses on leave in charge. Interest. It turned a profit and loss in financially that this subsequent. Okay, so we have that. I&#x27;ve never seen you ship. So in the present case that matches back matches with Joyce Joyce, okay, because our standing expenses are spending expenses and accrued expenses are indeed are interchangeable. Okay. So you can write down technical declaration in check. Example in sheet number who are being or books for Gela prints. However, the correct choices. Choice. Okay, that&#x27;s all part of a solution.

Puneet Prajapati · Answer

because you&#x27;re going to this day The concept Outstanding living You Okay, so we will write a technical at first Bordered by that we didn&#x27;t Mr. Okay, What is the alone against the words the business in today has a little white big who would send So this is you leave us do it however, but the end to be has not they see the Okay, so we Everton our technical division and got pixies. The abstaining revenue is the amount against which the business entity has delighted season services We customer But what happens? The entity has north received payment. It means the customer hasn&#x27;t yet baby among the position. So let&#x27;s understand. However it is clear, it is very clear from the definition. Okay, but we will understand toe an example of statistical data mystery. And it is Mr Thanks. Mr has delivered some goods and services. Thank you. Oh, but $5000. But what happens? Mr. X said Mr A, that he will pay off within Vinyard within two years depending on the business to business case. Okay. No, these $500 will be considered as outstanding living. Okay, that back which has to be collected from Mr X. So the Evin district people insect off outstanding that many so in the present gave the solution Matches with joys be okay because our standing revenue and cruel it could order every new. I didn&#x27;t change a bit. And you can I don&#x27;t she number one check number or your notebooks for future reference. And that&#x27;s on for our solution. Thank you.

Puneet Prajapati · Answer

Okay, so we are going to understand the meaning, but money. What? Really? Okay, so they&#x27;re not actually three types of comes in accounting is the subject. Read account or cell accounting? No. Okay. However, for the current his reveal industry anteria. So it is a type of gold, Which will it be? Never drives in a very common okay. Be carried forward will be Get it from who won financially it who end of it. So So it is a type of account which is never transferred. Who and it did it go? Let&#x27;s get a mystic an important and will be carried forward always from money will one financial year two Although it seems that 1st 1 is most every day. However, you will understand that Kate forward from one financial year to end it. There will be the most important characteristic That would be useful useful for you. Identify that bitch Israel a condom, which is another type of Okay, So you&#x27;re right. Example. So really count is open If you can see what other types off we can support our that Ilocos most of all, fixed a spectacle when you purchase any type of much injury who produced the products in which the businesses dealing. Okay, It was the one that is dealing. So fixed asset is purchased to produce the 11 goods required course. Now, in that case, you can understand that fixes it once purchased will be used for any scrutiny in 20 years. Because it because it is a machine, it is not like that that you have purchasing Korean Peninsula. And it will be absurd in next year. That is not the case. Okay, so fix dissect, Okay. Furniture that is used in business. Okay. In my country, when trian just a raw material which we have parties from other supplier 100 internees. Okay, the list is exhaustive. I&#x27;m writing, though I&#x27;m writing there very relevant items on a very relevant items for which for which he opened the really Okay, So retained earnings retained. Earnings account is one of the account which is carried forward from one fund and Chilean. We can see current financial year two. Next fun. Incheon. Okay, Sort of damned earnings. Or alternatively, they can say retained earnings is a type of retained earnings is account, which is never closed. Okay, So at this time, sir, from current financial year do next. Venture you so our choice matches vit. You can see why would I&#x27;m certain matches with choice beat Retained earnings is never most, or we can see it is never It is for all sorts of current financial year. Two next financial year. Okay, so you can write on sheet number one only on being your pulls off each of your parents. However, the correct choices choice be okay, that&#x27;s all for other solution. Thank you.

Puneet Prajapati · Answer

Okay, so we are going to understand the meeting off 12 grand villains and followed by there. We will understand that. How can we arrive at a different version off planted? It&#x27;s OK. So first of all, we have return of a technical definition. So her pal balance provide a brief 11 summary off these parties. Okay? With which the business entity has transacted. So we have returner technical declaration how ever we will understand. Very clear soon. But exactly. OK, so a travel balance is ah leaving first. Draw a specimen off Cal balance. Okay, that How does it look like followed by that people in this time, But how we can arrive at different type off evidences. Okay, so first of all legs, suppose there is a business entity that is ABC company who deals in furniture. Okay, so it has transacted with many entities to run the business like it s solitude with suppliers. A test run naked with multiple customers, bees within the country outside the country. Okay, so they&#x27;re not. They will be many, many types off. Bing does okay. Many types of vendors, many types off customers. So suppliers and customers, suppliers and vendors would be used interchangeably. Okay. So suppliers will have operated parents always most of the times and customers will ever David. But it&#x27;s okay. So let&#x27;s suppose after recording all the transaction that has that has been entered into by a busy company and other different parties, let&#x27;s suppose the founding Mrs 50 off them. Okay, 50 transactions off. The total religions has have been missed by accounting for for recording. So the effect of these transaction. So the effect of these transactions will not be present here and will not be present here. Okay, now what happens? The effect off all the transition will go to regained on its by there. So because the establish business entities for motive over profit and Intertainer lives be classify other profit or loss generated for the car India. Okay, Now what happens then? Then in a content encounters with these 50 transaction as mist. Okay, Now what happens that the counting tries to captured the effect in involved in a just in 12 minutes? Okay, Now adjusted trial balance work. What it will include it will include all the current elections which have been encountered with by content less bless the Miss tronics and practice 15. Mr Androgen, in the current case, Okay, so But until elections means which have been used to prepare these air goes okay, these balances which have been included to give these effects No. If in orderto account for all the Mr Election and current origins, V, we will classify. Or we can send people cancer, upper yearly profit yearly profit and loss, the transfer yearly profit and loss to retain that Mexico. So therefore, this account will also be included in post closing plan. It&#x27;s okay by that. So because all if let to suppose whatever drying the changes in list I don&#x27;t those selection will be will be related to revenue side or expense. It okay? Because in business, with this transaction beacon in counterfeit I don&#x27;t live in you. Okay, either it will be giving sales to us, all right, That it will be in nature off expenditure. Okay, so the next step will be so the profit or loss and maybe turns a profit, profit and loss dearly, who retained earnings so that is very retained. Earnings will also be trampled. Okay, So our current solution matches with okay. Our current solution matches with Joyce E. That&#x27;s all we have. And Mr So Far. Okay, So Joy sees the correct answer. That&#x27;s all part of a solution.

Puneet Prajapati · Answer

Okay, So in the current case, we will understand that did. And how many types of oppose Okay, forward by that people in this time, they were pipe off balance. We have for each off the type of a campus. Okay, so those balances will be the four balances for those ACOs and in an actual Also, we have only five type of occam&#x27;s throughout the accounting as a subject okay, with. So I&#x27;m classifying the same little towns which will have similar different balances. Okay, so you&#x27;ve been right down this because it is one of the golden rules in accounting to classify. All came to understand the balance off so they don&#x27;t. Five typical five type of becomes, as initially, I have said First is a six second expenses. Hurley&#x27;s liabilities, second its capital and then is okay, so a certain expenses will all vase on Venice. The always it means 99.9% would have Deborah dependence. So there is 0.1% chance that it will a credit balance. It&#x27;s a very rare case. And the real cases, I will let you know, followed by the explanation. Okay, So I certain expenses will have de rebellions all the times, Okay. Except for today, with their names, liabilities, Capital and 11 move will always there splintered. But it&#x27;s some of you may think that Why my don&#x27;t liabilities step. Italy revenue will have balance and vice versa. So because this is the methodology, okay, the accounting practitioners have not picked. Okay, so we will not oppose logic that how thereby Canvey, you know, reversed the position off the balances for liberty capital revenue in the second expenses. Okay, so we will Lord give much of a single back and being generally just mugger it because in practice, this concept will be a living for us. Okay, They will live with logics when we will face practical problems. So these are the is these every five accounts we have and followed by that being in the air the type of business in divorce for each of the now what happens in the business? In a business, there is a gender statement every convicted. Okay, So business is actually established. The one the prophet, if there is no profit, so there will be no use case off the business. OK, so this is mostly the critic site, and this is mostly the damage. So we have just seen on the never excited what we have. We have expenses. So this is the statement on a cold day Generally prepares, okay, To arrive at the profit or loss MIT Mir at the end of an engineer. So sail off goods and services. And this is the new site, which comprise off sale of virgins. Have something with business in which business under Dean&#x27;s okay, expenses could be the all material And like vice. Okay. Okay. So you know what happens now? What happens then? When accounting, Right. All of the items under that big site as well. It&#x27;s good. It&#x27;s a So the counting does not understand this. Really? Vincey. So it transferred all of the items in the in the statement income somebody account. If you consider income. Somebody on the north comes from here. Okay? Income. Somebody who are either deep profit thought knows made at the end of Okay, so we haven&#x27;t destroyed this, That I think that exactly will record our expenses. What we haven&#x27;t heard on the profit. And I think that inside we will write the sale items like that bottom old. For what amount? We have sold our goods and services to our customers. And all of the items in this statement will be closed or begins with people transfer. All of that comes to income. Somebody no more happens. Who plans for the amount? What happens if their revenues having a credit sales? Okay, so every item on the credit side will be debited next door. That idea. Okay. Next, Right here. And you can also record down. So that would be better for your future reference. So I&#x27;m writing with a green pen. Okay for closing. So close the items on the credit side vehemently. De pick those items and give up the rest. Forming credit to income. Saudi is there a Kia? Okay. And to close the items on the very day woodside variable. But I didn&#x27;t those items and give up the responding income somebody. It is just the oppose it off. What? Hear what you have done. Okay, so we can also write it like lettuce opposed. A certain expenses are having never balances. So I&#x27;m writing down with the right penned that what we have to do to close down the accounts. Okay, so we will credit. He could be a sitting expense. Typically in going somebody who lose their state and expensive. And we will Look, David E liabilities Capital have been who closed down to the income somebody. Okay, so what we have in our solution also. So our solution for current Kocian matches with choice deep. Okay, So to close down, the fees are Okay, we will close down, do the income summary. Okay? Because all of the items in this statement will be closed down too. Income. Somebody here. Okay, so that solution matches with choice d. That&#x27;s all part of a solution.

Problem

Corrections of errors that occurred on a previous…

Problem 17 Easy Difficulty

If a company’s board of directors designates a portion of earnings for a particular purpose due to
legal or contractual obligations, they are designated as ________.
A. retained earnings payable
B. appropriated retained earnings
C. cumulative retained earnings
D. restricted retained earnings

Answer

Related Courses

Principles of Accounting Volume 1: Financial Accounting

Related Topics

Discussion

Top Educators

Recommended Videos

Watch More Solved Questions in Chapter 14

Video Transcript

Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting

What do you need help with?

Textbooks

Ask a question

Courses

AI Tutor

Principles of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon CooperPrinciples of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting