The sale of additional shares of capital stock will cause retained earnings to increase.

Question

Quizplus · Accepted Answer

The sale of additional shares of capital stock does not affect retained earnings. Retained earnings are the accumulated profits of a company that are not distributed as dividends. When new shares of stock are sold, the company receives additional funds that can be used to reinvest in the business or pay off debt, but this does not impact the amount of earnings that have already been retained by the company.

The Sale of Additional Shares of Capital Stock Will Cause