Retained Earnings

question 83

Multiple Choice

Retained earnings:

• A) are the same thing as cash.
• B) are not a part of stockholders' equity.
• C) are accumulated profits that are kept in the corporation.
• D) represent what stockholders have invested into the corporation.

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Definitions:

ABC System

Activity-Based Costing System; a method of allocating overhead and indirect costs to specific products or services based on the activities they require.

Traditional Cost Systems

Traditional cost systems allocate overhead costs based on measures like direct labour hours or machine hours, often resulting in less accurate product costing.

Committed Resource

Assets or inputs that a company has dedicated to a certain project or operational activity, reflecting a long-term investment or commitment.

ABC Implementation

The process of applying Activity-Based Costing, an accounting method that assigns costs to activities based on their use of resources.