A corporation's earnings are the amount of revenue it receives for the sale of its products
A)minus its cost of production as measured by its accountants.Earnings must be paid out as dividends.
B)minus its cost of production as measured by its accountants.Earnings may be paid out as dividends or retained by the corporation.
C)minus its direct and indirect costs as measured by its economists.Earnings must be paid out as dividends.
D)minus its direct and indirect cost as measure by its economists.Earnings may be paid out as dividends or retained by the corporation.

Question

Quizplus · Accepted Answer

A corporation's earnings are calculated by deducting the cost of production as measured by its accountants from its revenue. This net income can either be paid out to shareholders as dividends or retained by the corporation for future investments. Therefore, option B is correct. Option A, C and D are incorrect as they either mention incorrect information regarding the payout of earnings, or the method of calculating cost of production.

A Corporation's Earnings Are the Amount of Revenue It Receives