Question

Which of the following is TRUE of retained earnings? a. retained earnings do not appear on...

Which of the following is TRUE of retained earnings?

a. retained earnings do not appear on any financial statement

b. retained earnings represent investments by the stockholders of a corporation

c. retained earnings represent capital that the corporation has earned through profitable operations

d. retained earnings are a liability on the corporate balance sheet

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Answer #1

Answer is option c

Retaiined earning represent capital that the corporation has earned through profitable operations.

1. Retained earning are the profits that a company has earned to date, less any dividends or other distributions paid to investors.

2.This amount is adjusted whenever there is an entry to the accounting records that impacts a revenue or expense account.

3. They appear nin balance sheet under the head reserves and surplus

Pls pls like if logic is explained

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