Retained earnings represent the source of net assets generated by the earnings process that exceed the firm's dividend declarations.Common practice refers to the process of curtailing dividends to accumulate assets, represented by retained earnings, as _____.
A)operating activities
B)investing activities
C)external financing
D)internal financing
E)dividend seizure

Question

Quizplus · Accepted Answer

Retained earnings are a form of internal financing, as they represent profits that are retained by the company instead of being distributed to shareholders as dividends.

Retained Earnings Represent the Source of Net Assets Generated by the Earnings