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retained profit is important to a business because it helps in maintaining the business secrets as the business is using the internal source of finance, is also important because it is a way of saving interest

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12y ago

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What are the possible causes fo retained earnings?

only PROFIT WHICH IS RETAINED IN THE BUSINESS


Why is profit important for a business?

profit is important for a business because without profit there is no business. they need to generate profit to keep the business alive. profit well help the move up the business ladder to become a more successful business !


Is retained profit the same as net profit?

No, retained profit and net profit are not the same. Net profit is the total revenue earned by a company after deducting all expenses, including taxes, overheads, and costs of goods sold. Retained profit, on the other hand, is a portion of net profit that is kept by the company for reinvestment in the business, rather than being distributed to shareholders as dividends.


Do retained earnings show on a balance sheet?

Retained Earnings in BS. There are to terms in Finance Net profit and Retained Earnings. Net profit which is earned during the year from the business transactions. where the Retained earnings is carried over from the business over the period of time. which stays either asset or liability side of the balance sheet. Every year the Net profit/Loss is added to the Retained earnings account which is carried forward to the next year and Net profit account is become 0 at the end of the year.


Can dividends be paid out of retained earnings?

RETAINED EARINING ARE THE FINAL BALANCE OF THE PROFIT WHICH IS LEFT AND REATINED BACK IN THE BUSINESS AFTER DISTRIBUTION OF DIVIDENDS, HENCE RETAINED EARNING IS DERIVED AFTER PAYMENT OF DIVIDEND


What is revenue reserve?

THE REVENUE RESERVE IS THAT PART OF PROFIT THAT HAS BEEN NOT GIVEN TO THE SHAREHOLDER BUT RETAINED IN THE BUSINESS FOR FURTHER GROWTH. HENCE REVENUE RESERVE AS PAR DEFINATION IS THE PART OF THE PROFITS RETAINED IN THE BUSINESS. == ==


Why is profit important to a business?

because business is all about the large profit at low budget


Do retained earning and retained profit the same?

Yes


Why profit is not important to a business?

Profit is important to businesses because it is how they continue to remain open. When a business isn't profitable it will cease to exist.


How is retained earnings calculated?

1. If dividend paid: Retained Earnings = Net profit - dividend if dividend not paid: Retained earnings = Net profit


What the advantages of retained profit?

· This is often a very difficult idea to understand but, in reality, it is very simple. When a business makes a profit and it does not spend it, it keeps it - and accountants call profits that are kept and not spent retained profits. That's all. The retained profit is then available to use within the business to help with buying new machinery, vehicles, computers and so on or developing the business in any other way. Retained profits are also kept if the owners think that they may have difficulties in the future so they save them for a rainy day!


Why is profit important to businesses?

If there is no profit the business fails because thats the reason for the business in the first place. :-)