1334. Surplus not distributed (retained earnings) could contribute to

Financial disaster for a company
Financial soundness of a company
Discredit of a company in the eyes of public
Liabilities of a company
✅ The correct answer is B.
Retained earnings refer to the percentage of net earnings not paid out as dividends, but retained by the company to be reinvested in its core business or to pay debt. Retained earnings contribute to the financial soundness of the company.

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