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Accumulated earnings from the firm's profitable operations that are kept in the business and not paid out to stockholders in distributions of company profits are called earnings.

Question

Accumulated earnings from the firm's profitable operations that are kept in the business and not paid out to stockholders in distributions of company profits are called earnings.

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Solution

The accumulated earnings from the firm's profitable operations that are kept in the business and not paid out to stockholders in distributions of company profits are called "retained earnings."

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"All of the following are correct about the 'earnings' that is managed by companies, except for:" Earnings includes total comprehensive income. Earnings is 'net profit after tax'. Earnings excludes 'other comprehensive income'. Earnings is used to compute the Earnings per share ratio.

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