Which of the Following Statements About Retained Earnings Restrictions Is

Multiple Choice

Which of the following statements about retained earnings restrictions is incorrect?

A) Many states require a corporation to restrict retained earnings for the cost of treasury stock purchased.
B) Long-term debt contracts may impose a restriction on retained earnings as a condition for the loan.
C) The board of directors of a corporation may voluntarily create retained earnings restrictions for specific purposes.
D) Retained earnings restrictions are generally disclosed through a journal entry on the books of a company.