Question

an adjustment to unappropriated retained earnings to eliminate appropriated retained earnings is a deduction a deduction...

an adjustment to unappropriated retained earnings to eliminate appropriated retained earnings is

a deduction

a deduction to the extent of dividends paid

a addition

a addition to the extent of dividends paid

Business   Accounting   
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Answer #1

Unappropriated retained earnings means the remaining finds after companies deduct the costs of business from sales revenue. Whereas appropriated retained earnings are that part of Unappropriated Retained Earnings which is earmarked for some specific purpose. Appropriated retained earnings can't be used to pay dividends.

An adjustment to unappropriated retained earnings to eliminate appropriated retained earnings is - a deduction.

Because eliminating appropriated retained earnings from unappropriated retained earnings means DEDUCTING appropriated retained earnings from unappropriated retained earnings.

Hence the correct answer is (A) a deduction.

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