Retained earnings are the cumulative net profits or losses minus dividends paid since the date of incorporation, and they are part of shareholders' equity. They represent the portion of a company's earnings that are not paid out as dividends but are instead reinvested or retained for future growth opportunities. Therefore, choice D is the correct answer.

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Retained Earnings

Question 59

Multiple Choice

Retained earnings:

A) Are the cumulative net profits or losses minus dividends paid since the date of incorporation.
B) Are part of the income statement.
C) Represent an amount of cash available to pay shareholders.
D) Are the cumulative net profits or losses minus dividends paid since the date of incorporation,and are part of shareholders' equity.
E) All of these answers are correct.

Correct Answer: