Small business owners receive income from profits in the form of an increase in their share of the business through an increase in retained earnings.

Question

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Small business owners can receive income from profits through an increase in their share of the business, which is reflected in the balance of retained earnings. Retained earnings are the accumulated profits that remain in the business after dividends or distributions to owners have been paid out. As profits increase, the balance of retained earnings also increases, which can provide a source of income to small business owners.

Small Business Owners Receive Income from Profits in the Form