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Retained earnings represents:
Multiple Choice :
a. cumulative net income of the firm since its beginning that has not been distributed to its stockholders in the form of dividends.
b. the total net income of the firm since its beginning.
c. net income plus gains (or minus losses) on treasury stock transactions.
d. cash that is available for dividends.

Answer :

Answer:

The correct answer is option a.

Explanation:

Retained earnings are the cumulative net income of the firm since its beginning which has not been distributed to its stockholders in the form of dividends.

In other words, retained earnings can be defined as the income earned to date after deducting the dividend paid to the stockholders or any other payments to the investors.

It is the part of the profit that has not been distributed but instead retained for investment or to pay liabilities.

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