Question

Retained earnings:40)A)Generally consists of a company's cumulative net income less any net losses and dividends declared since its inception.B)Represents the amount shareholders are guaranteed to receive upon company liquidation.C)Are never adjusted for anything other than net income or dividends.D)Can only be appropriated by setting aside a cash fund.E)Represent an amount of cash available to pay shareholders.

Answer 1

Answer:

The correct answer is letter "A": Generally consists of a company's cumulative net income less any net losses and dividends declared since its inception.

Explanation:

Retained Earnings is the portion of the net earnings of a company that it does not pay as dividends to stakeholders. The corporation retains this money and reinvests it or uses it to pay off a portion of its debt. Retained earnings are calculated by taking the retained earnings at the beginning of the period and adding the current year's net income. Then, net losses are subtracted. The final result represents the retained earnings of the period.