The funds that are kept by the firm out of profits and after dividends are paid are called which of the following?

Question

Quizplus · Accepted Answer

Retained earnings refer to the portion of profits that a company retains after paying out dividends to shareholders. These funds are used for various purposes such as reinvesting in the business, repaying debt, or distributing stock dividends. Therefore, out of the given options, retained earnings is the most appropriate term to describe the funds kept by a firm out of profits after dividends are paid. Choices A, B and D are incorrect as they do not accurately describe this concept.

The Funds That Are Kept by the Firm Out of Profits