Retained earnings generally consist of a company's cumulative net income less any net losses and dividends declared since its inception.

Question

Quizplus · Accepted Answer

Retained earnings are the portion of a company's profits that have not been distributed as dividends but are instead kept by the company for reinvestment in its core business or to pay off debt. Retained earnings are calculated as the company's cumulative net income less any net losses and dividends declared since it began operations. Therefore, the statement is true.

Retained Earnings Generally Consist of a Company's Cumulative Net Income