A corporation that does not distribute all of its profit to stockholders has ___.
A) retained earnings
B) unpaid dividends
C) cash on hand
D) accounts payable

Question

​A corporation that does not distribute all of its profit to stockholders has ___.
A) ​retained earnings
B) ​unpaid dividends
C) ​cash on hand
D) ​accounts payable

Quizplus · Accepted Answer

Retained earnings are profits that a corporation chooses to keep rather than distribute to stockholders as dividends. This money can be used for reinvestment in the company or held as a reserve for future use. Therefore, a corporation that does not distribute all of its profit to stockholders has retained earnings. Choices B, C, and D are incorrect as they do not specifically refer to profits that are not distributed to stockholders.

​A Corporation That Does Not Distribute All of Its Profit

A Corporation That Does Not Distribute All of Its Profit