Question

The net income that firm earns can either be paid out to shareholders asas ____ or or can be reinvested in the company as ____ .A. interest; additional paid-in capital B. dividends; retained earnings C. shares; capital stock. D. capital gains; additional E. paid-in capital interest; F. retained earnings

Answer 1

Answer:

B. Dividend; retained earnings

Explanation:

The payment made by a firm to its shareholders as a distribution of profits is called dividend. If a company makes profit then it reinvests the profits and pays a proportion of the profit as divided to its shareholders.

It can be in cash or in forms of further shares. While retained earnings are the earning that a company has earned after paying dividends and other distribution to the investors. It is reinvested every time there is an entry in the accounting records.