If a Firm Has $1 000 000 in Retained Earnings

question 129

Multiple Choice

If a firm has $1 000 000 in retained earnings, what does this mean?

• A) That the firm had $2 000 000 at the beginning of year but paid out $1 000 000 during the year in dividends
• B) That the company is owed $1 000 000 by its creditors but has not yet collected the money
• C) That the firm has $1 000 000 in the bank
• D) That the company's net profits less its dividend payments equals $1 000 000
• E) That the company has saved $1 000 000 during the period since the last balance sheet was made up

---

Definitions:

Integumentary System

The bodily system consisting of the skin, hair, nails, and exocrine glands; it protects the body from external damage and regulates temperature.

Lymphatic System

A network of vessels, tissues, and organs that helps to maintain fluid balance, protect against pathogens, and support the immune system.

Nervous System

The part of an organism that coordinates its actions by transmitting signals to and from different parts of its body.

Reproductive System

The system of organs and structures in organisms that work together for the purpose of reproduction.