Daniel, the owner of a bookstore, decides to reinvest his personal profits from the current fiscal year toward renovating the store and expanding its inventory. In the context of owners' equity, the profits that Daniel reinvests in the bookstore are called:

Question

Quizplus · Accepted Answer

Retained earnings refer to the portion of profits that a company keeps or reinvests in the business rather than distributing to shareholders as dividends. In this case, Daniel is reinvesting his profits back into the bookstore.

Daniel, the Owner of a Bookstore, Decides to Reinvest His