Question

Retained earnings is a. The positive cash flows of a company. b. The net worth of a company. c. The owners' equity that has accumulated as a result of profitable operations. d. Equal to the total assets of a company.

Answer 1

Answer:

The correct answer is letter "C": The owners' equity that has accumulated as a result of profitable operations.

Explanation:

Retained Earnings are the part of the company's net profits it does not pay out as dividends to shareholders. The company retains the money and reinvests it in the company, or uses it to pay off a part of its debt. To see how much profits a corporation has kept, look under the Shareholder's equity in the Balance Sheet.