Indicate Whether Each of the Following Statements Is True or False

Essay

Indicate whether each of the following statements is true or false.
_____ a) An appropriation of retained earnings limits the amount available for dividends.
_____ b) Appropriating retained earnings is considered an asset exchange transaction.
_____ c) An appropriation is recorded as a decrease to the appropriated retained earnings account and an increase to retained earnings.
_____ d) One reason for an appropriation of retained earnings is that there may be restrictive covenants in credit agreements.
_____ e) An appropriation has no effect on the accounting equation.