Retained earnings is the cash that has been generated by the firm through its operations which has not been paid out to shareholders as dividends.Retained earnings are kept in cash or near cash accounts and thus, these cash accounts, when added together, will always be equal to the total retained earnings of the firm.

Question

Quizplus · Accepted Answer

Retained earnings represent the cumulative net income of a company that has been retained, not necessarily in cash, but reinvested in the business or used to pay off debt. They are not always equal to cash or near-cash accounts.

Retained Earnings Is the Cash That Has Been Generated by the Firm