Final answer:
False. A corporation's "earnings and profits" account is different from the company's "retained earnings" account on its balance sheet.
Step-by-step explanation:
False. A corporation's "earnings and profits" account is different from the company's "retained earnings" account on its balance sheet. While both accounts are related to a corporation's financial performance, they represent different aspects.
"Earnings and profits" is a tax concept that measures a corporation's taxable income, dividends, and other distributions to shareholders. It is used to determine the tax liability of the corporation and its shareholders.
On the other hand, "retained earnings" represents the accumulated net income of the corporation that has not been distributed to shareholders as dividends. It is a component of the equity section of the balance sheet and reflects the company's ability to generate profits over time.