The ownership claim arising from reinvestment of previous profits is called:
A) stockholders' equity
B) retained earnings
C) net assets
D) reinvestment income

Question

Quizplus · Accepted Answer

Retained earnings refer to the portion of net income that is retained by a company rather than distributed to its shareholders as dividends. This reinvestment of previous profits increases the ownership claim of the shareholders.

The Ownership Claim Arising from Reinvestment of Previous Profits Is