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Multiple Choice Question
Retained earnings is
a part of stockholders’ equity
a current liability
a conrrent asset

Ask by Kirk Carlson. in the United States
Jan 26,2025

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Retained earnings is a part of stockholders’ equity.

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Retained earnings is like a company’s piggy bank! It represents the cumulative profits that a business has kept instead of distributing them as dividends to shareholders. This cash can be reinvested into the company for growth or used to pay down debt, adding to its overall value.
When it comes to stockholder equity, think of it as the backbone of a company’s financial health. Retained earnings play a crucial role in assessing a company’s ability to reinvest in itself and provide returns to its shareholders, making it a vital area of interest for investors and stakeholders alike!

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