An entry to appropriate a portion of retained earnings to finance a future plant expansion would include a credit to:

Question

Quizplus · Accepted Answer

The correct entry to set aside a portion of retained earnings for a specific purpose, like financing a future plant expansion, involves crediting "Retained Earnings Appropriated for Plant Expansion." This account reflects the company's decision to earmark a portion of its retained earnings for a specific use, without actually distributing these funds to shareholders or investing them immediately. It's a way to communicate to stakeholders that these funds are being saved for a particular purpose, thus not available for dividends or other uses.

An Entry to Appropriate a Portion of Retained Earnings to Finance