Which of the following terms equals the total profits of a company minus all dividends (distributions of profits) to shareholders?
A) net earnings
B) net worth
C) retained earnings
D) owners' equity

Question

Quizplus · Accepted Answer

Retained earnings is the amount of profits that a company has kept after paying all its expenses and distributing dividends to shareholders. It is calculated by subtracting the dividends paid from the total profits of the company. Net earnings (A) refers to the profits made by a company after deducting all expenses. Net worth (B) and owners' equity (D) refer to the total value of assets minus the total liabilities of a company. They do not reflect retained earnings.

Which of the Following Terms Equals the Total Profits of a Company