Q95
Retained earnings are ?
A.
an indication of a company's liquidity
B.
the same as cash in the bank
C.
not important when determining dividends
D.
the cumulative earnings of the company after dividends.
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Retained earnings are the cumulative earnings of the company after dividends. Retained earnings are the profits that a company has earned to date, less any dividends or other distributions paid to investors. This amount is adjusted whenever there is an entry to the accounting records that impacts a revenue or expense account.