In the Context of Owners' Equity, Which of the Following

question 45

Multiple Choice

In the context of owners' equity, which of the following is true of retained earnings?

• A) They refer to a firm's additional profits that are used for paying executive salary.
• B) They are accumulated earnings reinvested in a company rather than being paid to the owners.
• C) They are a firm's earnings that are kept aside for crisis management situations.
• D) They refer to salaries that are withheld in case an employee is involved in fraudulent activities.