Retained earnings on the balance sheet?

a) increase as operating income increases

b) equals the sum of all net income before preferred dividends are deducted

c) equals common stock plus capital in excess of par

d) have already been reinvested in the firm

Question

Kendall Robertson

Business

21 February, 17:35

Retained earnings on the balance sheet?

a) increase as operating income increases

b) equals the sum of all net income before preferred dividends are deducted

c) equals common stock plus capital in excess of par

d) have already been reinvested in the firm

+1

Answers (1)

Know the Answer?

Patience Grimes · Answer 1

The answer is D. have already been reinvested in the firm

Explanation:

Retained Earning is that part of income or profit that was not distributed out as dividend.

It is retained to grow the business or make the business bigger. It is part of shareholder's equity.

Option A is wrong. It doesn't increase with operating income. It depends on dividend policy and the net profit

Retained earnings on the balance sheet?a) increase as operating income increasesb) equals the sum of all net income before preferred dividends are deductedc) equals common stock plus capital in excess of pard) have already been reinvested in the firm

Retained earnings on the balance sheet?

a) increase as operating income increases

b) equals the sum of all net income before preferred dividends are deducted

c) equals common stock plus capital in excess of par

d) have already been reinvested in the firm