Asked by Ismael Trujillo on Jun 26, 2024
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Retained earnings are the existing shareholders' reinvested profit and do not represent cash.
Retained Earnings
Retained earnings are the portion of a company's profits that is kept or retained and not paid out as dividends to shareholders but reinvested in its core business or to pay debt.
Shareholders'
Individuals or entities that own one or more shares of stock in a public or private corporation, granting them certain rights such as voting on corporate matters.
Reinvested Profit
Earnings that a company plows back into itself to fund growth, debt repayment, or asset purchases rather than distributing to shareholders as dividends.
- Identify the nature of retained earnings and their representation on financial statements.
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Learning Objectives
- Identify the nature of retained earnings and their representation on financial statements.
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