Please refer to the equity section of the balance sheet shown below:

The amount shown for Retained earnings would be called a(n):

Question

Please refer to the equity section of the balance sheet shown below:

The amount shown for Retained earnings would be called a(n):

Quizplus · Accepted Answer

Retained earnings refer to the portion of a company’s net income that is not paid out as dividends but rather is kept as part of the company’s equity for future use. If a company has negative retained earnings, it means that it has accumulated losses over time that exceed its profits or that it has paid out more in dividends than it has earned. This is often referred to as a retained earnings deficit. Therefore, the amount shown for Retained earnings in the equity section of the balance sheet would be called a retained earnings deficit.

Please Refer to the Equity Section of the Balance Sheet