On the balance sheet, retained earnings represents
A)net profits for the current year
B)net profits for the current year minus preferred stock dividends
C)cash reinvested in fixed assets to support growth
D)the total of earnings reinvested in the firm for the current year
E)none of the above

Question

Quizplus · Accepted Answer

Retained earnings on the balance sheet represent the cumulative total of net income that has been reinvested in the company over time, not just for the current year. It is not limited to cash reinvested or net profits minus dividends for the current year.

On the Balance Sheet, Retained Earnings Represents