Retained earnings generally consist of a company's cumulative net income less any net losses and dividends declared since its inception. They can be subject to a statutory restriction by a state, and can also be subject to restrictions due to loan agreements. Retained earnings can also be subject to appropriation by a corporation's directors for special activities. Therefore, all of these choices are correct.

Solved

Retained Earnings

Question 85

Multiple Choice

Retained earnings:

A) Generally consists of a company's cumulative net income less any net losses and dividends declared since its inception.
B) Can be subject to a statutory restriction by a state.
C) Can be subject to restrictions due to loan agreements.
D) Can be subject to appropriation by a corporation's directors for special activities.
E) All of these.

Correct Answer: