A credit balance in retained profits:
A) equals the balance of cash available for dividends.
B) indicates that a profit was earned in the last financial period.
C) represents the profits earned and not paid out in dividends.
D) indicates that a loss was earned in the last financial period.

Question

Quizplus · Accepted Answer

A credit balance in retained profits represents the profits earned but not paid out in dividends. This means that the company has made a profit in the last financial period but has not distributed all of it to its shareholders as dividends.

A Credit Balance in Retained Profits