The retained earnings item on the balance sheet is:
A)equal to net profit for the period in question.
B)equal to the total of plowed-back earnings shown on previous income statements.
C)equal to the total of all earnings-after-taxes figures shown on previous income statements.
D)offset by an intangible asset account, such as goodwill.
E)equal to total assets minus total liabilities.

Question

Quizplus · Accepted Answer

Retained earnings represent the cumulative amount of net income that a company has retained, rather than distributed as dividends, over time. It is the total of plowed-back earnings from previous income statements.

The Retained Earnings Item on the Balance Sheet Is