Which of the following statements is true?
A) Retained earnings is an asset.
B) Retained earnings has a debit balance for a successful corporation.
C) Retained earnings represents the future dividend liability of the company.
D) Retained earnings represents the profit that has been earned by the company, less any dividends declared since the first day of operations.

Question

Quizplus · Accepted Answer

Retained earnings represent the cumulative amount of net income earned by a company that has not been distributed to shareholders as dividends. It is a part of shareholders' equity on the balance sheet, reflecting the company's accumulated net earnings or profit that it has decided to reinvest in the business rather than pay out to shareholders. Retained earnings increase with net income and decrease with net losses and dividends paid out.

Which of the Following Statements Is True