In all states,Sports Fitness Club Company and other corporations can pay dividends from

Question

Quizplus · Accepted Answer

Dividends are paid out of retained earnings, which are the accumulated profits that a company chooses not to distribute as dividends in previous periods. Therefore, option C is the correct choice. Option A and D are incorrect because gross profits and surplus are not the same as retained earnings. Option B is not totally incorrect, as dividends could be paid out of net profits if there are no retained earnings available, but it is still not the best choice.

In All States,Sports Fitness Club Company and Other Corporations Can