Retained Earnings Are

question 59

Multiple Choice

Retained earnings are

• A) the same as net profit.
• B) interest earned on bond investments.
• C) nontaxable income.
• D) a form of equity financing.
• E) the portion of the profit paid to stockholders.

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Definitions:

Lump-Sum Tax

A tax that is a fixed amount and does not vary with the taxpayer's income or consumption levels.

Proportional Tax

A tax system where the tax rate remains constant regardless of the amount subject to tax, meaning everyone pays the same proportion of their income.

Regressive Tax

A tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases, disproportionately affecting lower-income individuals.

Interactional Justice

Refers to the quality of the interpersonal treatment people receive when a decision is implemented.