Final answer:
Retained earnings may be used by a company to invest in accounts receivable, inventory, or plant and equipment, meaning option (d) A, B, & C is correct.
Step-by-step explanation:
The retained earnings account represents the cumulative amount of net income that a company has decided to keep and reinvest in its business rather than paying out as dividends. When a company invests these retained earnings, they can take the form of various assets on the company's balance sheet. Specifically, retained earnings can be used to fund the acquisition or increase of accounts receivable, inventory, or plant and equipment. This means that the correct answer to the question of which form retained earnings can take is (d) A, B, & C, indicating that retained earnings may be invested into any, or all, of these asset categories on a company's balance sheet.
To illustrate, if a company has high retained earnings, it could direct these funds towards increasing its accounts receivable by extending more credit to customers, enhancing its inventory to meet consumer demand or investing in new plant and equipment for production expansion or modernization. All of these actions are aimed to drive future growth and profits, reflecting an investment of the company's accumulated profits back into the business's operational capacity and assets.