Retained earnings are the portion of a company's profit that is held or retained and saved for future use. Retained earnings could be used for investing in the business, paying debts or distributing dividends to shareholders.

From the options given:

1. Undistributed corporate profits: Yes, these constitute retained earnings. These are profits that the corporation has earned but has not yet distributed to its shareholders.

2. Distributed corporate profits: No, these do not constitute retained earnings. Once profits are distributed to shareholders, they are no longer part of the company's retained earnings.

3. Undistributed sole proprietor profit: No, this does not constitute retained earnings. In a sole proprietorship, all profits belong to the owner and there is no concept of retained earnings.

4. Corporate income taxes: No, these do not constitute retained earnings. Taxes are an expense, not a profit.

So, the correct answer is "Undistributed corporate profits".

Question

Retained earnings are the portion of a company's profit that is held or retained and saved for future use. Retained earnings could be used for investing in the business, paying debts or distributing dividends to shareholders.

From the options given:

1. Undistributed corporate profits: Yes, these constitute retained earnings. These are profits that the corporation has earned but has not yet distributed to its shareholders.

2. Distributed corporate profits: No, these do not constitute retained earnings. Once profits are distributed to shareholders, they are no longer part of the company's retained earnings.

3. Undistributed sole proprietor profit: No, this does not constitute retained earnings. In a sole proprietorship, all profits belong to the owner and there is no concept of retained earnings.

4. Corporate income taxes: No, these do not constitute retained earnings. Taxes are an expense, not a profit.

So, the correct answer is "Undistributed corporate profits".

Knowee AI · Accepted Answer

Retained earnings are the portion of a company's profit that is held or retained and saved for future use. Retained earnings could be used for investing in the business, paying debts or distributing dividends to shareholders.

From the options given:

1. Undistributed corporate profits: Yes, these constitute retained earnings. These are profits that the corporation has earned but has not yet distributed to its shareholders.

2. Distributed corporate profits: No, these do not constitute retained earnings. Once profits are distributed to shareholders, they are no longer part of the company's retained earnings.

3. Undistributed sole proprietor profit: No, this does not constitute retained earnings. In a sole proprietorship, all profits belong to the owner and there is no concept of retained earnings.

4. Corporate income taxes: No, these do not constitute retained earnings. Taxes are an expense, not a profit.

So, the correct answer is "Undistributed corporate profits".

Which of the following constitute retained earnings?Multiple choice question.Undistributed corporate profitsDistributed corporate profitsUndistributed sole proprietor profitCorporate income taxes

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