What does the retained earnings account measure? a) Cash held by the company since its inception. b) Payments made to shareholders in the form of cash or stock dividends. c) All undistributed earnings. d) Financial resources currently available to satisfy financial obligations.

What does the retained earnings account measure? a) Cash held by the company since its inception. b) Payments made to shareholders in the form of cash or stock dividends. c) All undistributed earnings. d) Financial resources currently available to satisfy financial obligations.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 16MC: Retained earnings is accurately described by all except which of the following statements? A....

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Question

What does the retained earnings account measure?
a) Cash held by the company since its inception.
b) Payments made to shareholders in the form of cash or stock dividends.
c) All undistributed earnings.
d) Financial resources currently available to satisfy financial obligations.

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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