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20 June, 19:23

Retained earnings: Select one: a. Generally consists of a company's cumulative net income less any net losses and dividends declared since its inception. b. Can only be appropriated by setting aside a cash fund. c. Represent an amount of cash available to pay shareholders. d. Are never adjusted for anything other than net income or dividends.

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  1. 20 June, 19:35
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    A) Generally consists of a company's cumulative net income less any net losses and dividends declared since its inception.

    Explanation:

    retained earnings = net income after taxes - distributed dividends

    Retained earnings is a permanent account in the balance sheet, and it increases depending on the amount of net income - dividends, or decreases when the company has a net loss. Generally, companies will not distribute dividends when they have a net loss, although the law allows them to do so as long as they have a credit balance in retained earnings. The dividends that a company distributes come form net income or retained earnings.

    Retained earnings can also be adjusted when repurchasing and reselling treasury stock generates a loss which is larger than additional paid-in capital in excess of par value.
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