Question

the retained earnings of a corporation is ________. a. internally generated equity that is received from employee stock purchases b. externally generated equity that is acquired from banks and other creditors c. externally generated equity that is contributed by shareholders d. internally generated equity that is earned by profitable operations that is not distributed to stockholders

Answer 1

internally generated equity that is earned by profitable operations that is not distributed to stockholders

Step-by-step explanation:

Retained Earnings

This is simply known as an account used by a corporation to give a short breakdown or summary of the earned capital component of its shareholders' equity. Mathematically or primarily, it consist of the cumulative amount of net income over the life of the corporation, minus the cumulative amount of dividends that is paid out to shareholders.

It is often classified as stockholders equity account. It is a permanent or real account, as opposed to a temporary-equity or nominal account. Both cash dividends and stock dividends reduces retained earnings.