Undistributed profits of a firm are
A) profits that are available to be reinvested in the firm's operations.
B) earnings that are used to cover interest expenses of the firm.
C) earnings that are used to pay dividends to shareholders.
D) profits that are paid out to owners of the firm.
E) earnings that are used to cover the costs of production.

Question

Quizplus · Accepted Answer

Undistributed profits are profits that are not paid out as dividends to shareholders but are instead kept by the firm to be reinvested in its operations. These profits can be used to fund future growth initiatives, research and development, or other investments that will benefit the company over the long term.

Undistributed Profits of a Firm Are