All of the following statements are true EXCEPT:
A)retained earnings is common stock minus paid in capital.
B)retained earnings are generated when a firm has excess cash.
C)retained earnings are the accumulated profits not paid out in dividends.
D)All of the above.

Question

Quizplus · Accepted Answer

Retained earnings are not generated when a firm has excess cash. Rather, they are the accumulated profits that have not been distributed to the shareholders in the form of dividends. Therefore, statements A and C are true, while statement B is false.

All of the Following Statements Are True EXCEPT