The Portion of Net Income That the Company Has Kept

question 32

Multiple Choice

The portion of net income that the company has kept over a period of years is called:

• A) common stock.
• B) retained earnings.
• C) revenue.
• D) gross profit.

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Definitions:

Face Value

The original cost of a bond or stock, as indicated on the certificate; it is also known as the nominal or par value.

Above Face Value

A situation where a financial instrument, such as a bond, is traded for more than its original issue price.

Issued Bonds

Debt securities that a company or government has sold to investors to raise capital.

Premium on Bonds Payable

The excess amount over the face value that investors pay when they purchase a bond, representing an additional cost to the issuer.