Quiz – T/F: Retained earnings account on the balance sheet does not represent cash

Fundamentals of Financial Management, Concise, 9e & 10e by Brigham and Houston


Determine if the following is true or false:

Retained earnings as shown on the balance sheet don't represent cash. Instead, it represents part of the stockholders' claim against the firm's existing assets. Retained earnings are essentially stockholders' reinvested earnings.

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