Which of the following correctly describes retained earnings?
A)It is the cumulative net income of a company.
B)It represents the investments by stockholders in a company.
C)It equals total assets minus total liabilities.
D)It is the cumulative net income of a company less dividend declarations.

Question

Quizplus · Accepted Answer

Retained earnings are the cumulative profits not distributed to investors. That is the cumulative net income less dividend declarations.

Which of the Following Correctly Describes Retained Earnings