The portion of net income that is held by a firm for future growth comprises which one of the following balance sheet accounts?
A)capital surplus
B)common stock
C)internal earnings
D)retained earnings
E)net earnings

Question

Quizplus · Accepted Answer

Retained earnings are the portion of net income that is held by a firm for future growth. This is a balance sheet account that represents the accumulated earnings that have not been paid out as dividends to shareholders. It is calculated by subtracting dividends paid to shareholders from the company's net income.

The Portion of Net Income That Is Held by a Firm