For a company, retained earnings represent:
A) contributed capital from shareholders.
B) profits retained by the company before tax is paid to the government.
C) net cash retained by the company before any payment of dividends to shareholders.
D) profits retained by the company after payment of dividends, and after any transfer to and from reserves.

Question

Quizplus · Accepted Answer

Retained earnings represent the profits that a company has kept after paying dividends to shareholders and any transfer to or from reserves. It is not contributed capital from shareholders (A) or profits retained before tax is paid (B). It can include net cash retained, but that is not the main definition (C).

For a Company, Retained Earnings Represent