Retained earnings is the ________.

Question

Quizplus · Accepted Answer

Retained earnings are the portion of a company's profits that are retained by the company instead of being distributed as dividends to shareholders. Beginning retained earnings plus net income minus dividends will give the current balance of retained earnings. Option A is incorrect as dividends are not maintained in treasury, but retained earnings may be. Option C is incorrect as past distributed profits are not considered retained earnings. Option D is incorrect as minimum legal capital is a requirement to be maintained by the company, but it is not considered retained earnings.

Retained Earnings Is the ________