Respuesta :
The statement "the balance in retained earnings equals all net income, less all dividends, since the company began operations." is true.
Give a brief account on retained earnings.
A company's historical profits, less whatever dividends it may have already paid, are referred to as retained earnings. The options below broadly cover all potential uses that a corporation might make of its excess cash and help you understand what retained earnings can tell you. For instance, because dividend payments are irrevocable, the first alternative results in the earned money permanently disappearing from the company's books and records. The investments and funding activities involved in all of the other alternatives constitute retained earnings because they all keep the earnings for usage within the company.
- Dividends are a way for the company's owners (shareholders) to receive some (or all) of the income money.
- It can be used to hire new sales representatives or expand already existing business operations, such as boosting the production capacity of the current items.
- It can be used to debut a new product or variety, such as when a producer of refrigerators decides to produce air conditioners or when a maker of chocolate cookies introduces orange- or pineapple-flavored variations.
- Any potential partnership, merger, or acquisition that boosts business prospects may be funded with the money.
- It can also be applied to share repurchases.
- Any unpaid loans (debt) that the company may have are repayable with the earnings.
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