Asked by Samantha Adams on Jun 25, 2024
Verified
Retained earnings are not part of the shareholders' claims on the company's net assets.
Retained Earnings
The amount of net earnings left in the company after dividends are paid out to shareholders, used for investment or to pay off debt.
- Master the concepts involving shareholders' equity, including the various components and its computation method.
Verified Answer
NM
Nadie Mc CarthyJun 28, 2024
Final Answer :
False
Explanation :
Retained earnings are a part of the shareholders' claims on the company's net assets. They represent the portion of profits that the company has chosen to keep and reinvest in the business rather than pay out as dividends to shareholders. Retained earnings increase the shareholders' equity in the company, which is a component of the company's net assets.
Learning Objectives
- Master the concepts involving shareholders' equity, including the various components and its computation method.