HGQ Corporation had a very profitable year in 2016. After increasing its dividend payout to shareholders, management wanted to reinvest some of the profits back in the company for future expansion. They would put the profits after dividend payouts into which of the following accounts?
A) share equity
B) investor earnings
C) retained earnings
D) secondary earnings

Question

Quizplus · Accepted Answer

The profits that are reinvested back in the company for future expansion are put into the retained earnings accounts. Retained earnings are the portion of a company's profits that are kept or retained by the company for future use, rather than being paid out as dividends to shareholders. Therefore, the best choice for HGQ Corporation to put the profits after dividend payouts would be the retained earnings account.

HGQ Corporation Had a Very Profitable Year in 2016