In the context of owners' equity, which of the following is true of retained earnings?

A. They refer to a firm's additional profits that are used for paying executive salary.
B. They are accumulated earnings reinvested in a company rather than being paid to the owners.
C. They are a firm's earnings that are kept aside for crisis management situations.
D. They refer to salaries that are withheld in case an employee is involved in fraudulent activities.


Answer: B

Business

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Answer the following statement true (T) or false (F)

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Mom's Apple Pies (MAP) earned $500,000 this year. The company follows the residual dividend policy when paying dividends. MAP has determined that it needs a total of $600,000 for investment in capital budgeting projects this year. If the company's debt/asset ratio is 40 percent, what will its dividend payout ratio be this year? MAP has no preferred stock.

A. 40% B. 28% C. 72% D. 48% E. 52%

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The copying of a genuine item without authorization, especially when passed off as the original item is:

a. economic espionage b. fraud c. racketeering d. insider trading e. none of the other choices

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