Which of the Following Statements About Retained Profits Is True

question 19

Multiple Choice

Which of the following statements about retained profits is true?

• A) Retained profits is the sum of past net profits/losses minus dividends declared.
• B) Retained profits indicates the total profits earned by a company since its inception.
• C) If a company does not pay a dividend,it cannot decrease.
• D) Retained profits is the current year's profit.

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Definitions:

Return On Investment

A performance measure used to evaluate the efficiency of an investment or compare different investments.

Residual Income

Earnings that exceed the minimum acceptable return on an investment or project, often used in performance measurement and compensation.

Managerial Performance

An evaluation of a manager's effectiveness in meeting organizational goals and managing resources efficiently.

Investment Centers

Parts of an organization that are responsible for their revenue, expenses, and investment in assets, allowing for a close measure of profitability.