Retained earnings are:
A) the amount of cash that the firm has saved up.
B) the difference between the net income earned and the dividends paid in a year.
C) the difference between the market price of the stock and the book value.
D) the amount of stock repurchased.

Question

Quizplus · Accepted Answer

Retained earnings represent the portion of net income that a company keeps (retains) rather than distributing to its shareholders as dividends. It is essentially the cumulative amount of earnings not paid out as dividends but reinvested in the business or held for future use.

Retained Earnings Are