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A. Absorb a fire loss when a company is self-insured.
B. Provide for a contingent loss that is probable and reasonable.
C. Smooth periodic income.
D. Restrict earnings available for dividends.
D. Restrict earnings available for dividends.
Answer option D >>>>>>>>>>>>>>>>> Restrict earnings available for dividends.
Appropriation of retained earnings is restriction imposed by management to limit availability of funds for dividends, and it is done for a particular purpose. Well option (B) may befit the restriction.
go with Sir Mir Mujtaba Ali and Sir Krishna..thanks for inviting me.
B. Provide for a contingent loss that is probable and reasonable.
A. is correct: Absorb a fire loss when a company is self-insured
