What does the retained earnings account measure? a) Cash held by the company since its inception. b) Payments made to shareholders in the form of cash or stock dividends. c) All undistributed earnings. d) Financial resources currently available to satisfy financial obligations.

What does the retained earnings account measure? a) Cash held by the company since its inception. b) Payments made to shareholders in the form of cash or stock dividends. c) All undistributed earnings. d) Financial resources currently available to satisfy financial obligations.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

What does the retained earnings account measure?
a) Cash held by the company since its inception.
b) Payments made to shareholders in the form of cash or stock dividends.
c) All undistributed earnings.
d) Financial resources currently available to satisfy financial obligations.

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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