A company may retain some or all of the earnings to finance growth and increase its potential for future earnings.

Question

Quizplus · Accepted Answer

All of the mentioned business structures (A) Sole proprietorship, (B) Partnership, and (C) Corporation can retain some or all of the earnings to finance growth and increase their potential for future earnings. This is a common practice across different types of business entities to reinvest in the business for expansion, research and development, or other strategic initiatives.

A Company May Retain Some or All of the Earnings