The portion of net income that the company has kept over a period of years and not used for dividends is called:
A)common stock.
B)retained earnings.
C)revenue.
D)gross profit.

Question

Quizplus · Accepted Answer

Retained earnings are the portion of the net income that a company has not distributed as dividends to shareholders but has kept for reinvestment or other purposes. This represents a source of financing for the company's future growth and operations. Common stock (A) represents ownership in the company and does not relate to retained earnings. Revenue (C) represents the total income generated by the company from its sales or services, not the portion retained by the company. Gross profit (D) is the revenue minus the cost of goods sold and does not relate to retained earnings specifically.

The Portion of Net Income That the Company Has Kept