A Large Retained Earnings Account Means That There Is Cash

question 52

True/False

A large retained earnings account means that there is cash available to pay dividends.

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Definitions:

Transfer Rights

The legal ability to transfer one's interest or rights in a piece of property, asset, or contract to another party.

Restrictions

Limitations or conditions imposed by law, regulation, or agreement that control how something can be used or what actions can be taken.

Buy-and-Sell Agreement

A legally binding agreement between co-owners that outlines what happens to a co-owner's share of a business if they leave the business or pass away.

Close Corporation Shareholders

Individuals or entities that hold shares in a closely held corporation, typically characterized by a small number of shareholders and restricted share transferability.