The Portion of a Company's Profits That Are Kept by the Company

question 67

Multiple Choice

The portion of a company's profits that are kept by the company rather than distributed to the stockholders as cash dividends is referred to as

• A) restricted earnings.
• B) venture capital.
• C) retained earnings.
• D) institutional investment.

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Definitions:

IFRS

International Financial Reporting Standards (IFRS) are a set of accounting standards developed by the International Accounting Standards Board (IASB) that guide how financial events are reported in financial statements globally.

GAAP

Generally Accepted Accounting Principles, standard guidelines and procedures for financial accounting and reporting in the U.S.

Indirect Method

A method used in cash flow statements where net income is adjusted for items that affected reported net income but did not result in an actual cash flow.

Direct Method

A cash flow statement presentation that lists actual cash inflows and outflows from operating activities.