The appropriated retained earnings can be returned to the unappropriated retained earnings account

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Appropriated retained earnings are retained earnings that have been earmarked for a specific purpose, such as a future project or investment. Once the appropriation has served its purpose, the appropriated retained earnings can be returned to the unappropriated retained earnings account. This is typically done by reversing the original entry that appropriated the funds, and this can be done at any time, not necessarily at year end or the first day of the new year. The directors may also decide to restrict the use of appropriated retained earnings, but this would not necessarily result in the funds being returned to the unappropriated retained earnings account.

The Appropriated Retained Earnings Can Be Returned to the Unappropriated