Retained earnings are not part of the shareholders' claims on the company's net assets.

Question

Quizplus · Accepted Answer

Retained earnings are a part of the shareholders' claims on the company's net assets. They represent the portion of profits that the company has chosen to keep and reinvest in the business rather than pay out as dividends to shareholders. Retained earnings increase the shareholders' equity in the company, which is a component of the company's net assets.

Retained Earnings Are Not Part of the Shareholders' Claims on the Company's