Describe restrictions on retained earnings.
College Accounting, Chapters 1-27
23rd Edition
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:HEINTZ, James A.
Chapter21: Corporations: Taxes, Earnings, Distributions, And The Statement Of Retained Earnings
Section: Chapter Questions
Problem 10RQ
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Describe restrictions on
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Definition:
Retained earnings: Retained earnings refer to the net income of the corporation that is retained in the corporation after the distribution of dividends to the shareholders. Retained earnings are a component of stockholder’s equity and reflect the changes over a period of time. It is used for business development, purchase of treasury stocks, and payment of liabilities.
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