Question of the Week

In a Corporation's financials, surplus earnings are accounted for as:

A. Net Income
B. Earnings after Interest
C. Gross Profits
D. Retained Earnings after Dividends
E. Operating Margin after Cost of Goods

Answer: D is the correct answer.

Surplus earnings are either plowed back into the company (retained earnings) or they are paid out to shareholders (dividends).
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