Asked by Doris Mansueto on May 08, 2024

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Most companies report restrictions of Retained Earnings by using a footnote to the Retained Earnings account.

Retained Earnings

The portion of a company's profits that is saved or retained and not distributed among shareholders as dividends, often reinvested in business operations.

Footnote

A footnote in financial statements is an additional note provided at the bottom of a financial document, offering further explanation or disclosure about the figures presented.

  • Comprehend and pinpoint the disclosures in financial statements linked to restrictions on retained earnings.
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AB
Ashley BaduraMay 13, 2024
Final Answer :
True
Explanation :
Companies often disclose restrictions on retained earnings in the footnotes to the financial statements to provide details on the nature of the restrictions and the amount of retained earnings affected.