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Is it true that Retained earnings have no cost to the firm?
Yes
Is additional paid in capital refers to a firm's retained earnings?
Additional paid in capital (or APIC) is a component of the shareholders equity section of the balance sheet. Retained earnings is a separate component of shareholders equity.
Is unappropriated retained earnings credit?
Yes, since this account (Retained Earnings) is a credit account and an uppropriate retained earnings account is simply a non-restricted account which is Retained Earnings !!! Even the restricted/ appropriate retained earnings are credited.
Which account represents the cummulative earning of the firm since it formation minus dividend s paid?
Retained earnings
What are the 2 parts of stockholders' equity divided into?
The two main categories of Stockholder's Equity are Capital Stock and Retained Earnings. Capital stock is the initial amount of money invested into the firm by its owners. The way the capital stock is structured depends on whether the firm is incorporated or not, and if it is, whether the corporation is publicly or privately held. Retained earnings is the cumulative income a company earns and decides to invest back into the firm (as opposed to paying it out as dividends to the owners). In any given year, Retained Earnings is equal to the last year's retained earnings plus current year net income, minus any dividends paid out to the owners.
Is it true that Retained earnings have no cost to the firm?
Yes
What part of the elements of financial statements does retained earnings belong to?
equity
Is additional paid in capital refers to a firm's retained earnings?
Additional paid in capital (or APIC) is a component of the shareholders equity section of the balance sheet. Retained earnings is a separate component of shareholders equity.
Is unappropriated retained earnings credit?
Yes, since this account (Retained Earnings) is a credit account and an uppropriate retained earnings account is simply a non-restricted account which is Retained Earnings !!! Even the restricted/ appropriate retained earnings are credited.
Which financial statement summarizes the changes in retained earnings?
Stetement of retained earnings summarizes the changes occured in retained earnings from opening balance to closing balance.
Which account represents the cummulative earning of the firm since it formation minus dividend s paid?
Retained earnings
What are the two sources of equity capital for the firm?
the two sources of equity or ownership capital for the firm are: 1. the purchase of common stock, and 2. retained earnings
What are the 2 parts of stockholders' equity divided into?
The two main categories of Stockholder's Equity are Capital Stock and Retained Earnings. Capital stock is the initial amount of money invested into the firm by its owners. The way the capital stock is structured depends on whether the firm is incorporated or not, and if it is, whether the corporation is publicly or privately held. Retained earnings is the cumulative income a company earns and decides to invest back into the firm (as opposed to paying it out as dividends to the owners). In any given year, Retained Earnings is equal to the last year's retained earnings plus current year net income, minus any dividends paid out to the owners.
If a firm has a positive level of retained earnings can a dividend be paid?
Yes, a firm with a positive level of retained earnings can pay dividends, as retained earnings represent accumulated profits available for distribution to shareholders. However, the decision to pay dividends also depends on other factors, such as cash flow, the company's financial health, and its future investment plans. Ultimately, the board of directors will determine if and how much to distribute as dividends based on these considerations.
What are the reasons for not using retained earnings when starting a new business?
A new business has no retained earnings. Retained earnings are prior years earnings that have not been distributed to the shareholders... if it is a brand new business there is no possible way to have retained earnings at inception date.
What is the normal balance of retained earnings?
normal balance of retained earnings: credit.
Formulla for retained earnings?
retained earnings=profit after tax- dividend distribution
