Question

‘Retained Earnings’ are also known as ______.

Options

• Residual owners of the company

• Loan capital of the company

• Short-term capital of the company

• Ploughing back of profits

Answer 1

‘Retained Earnings’ are also known as ploughing back of profits.

Explanation:

• The amount of net profit that a corporation keeps for internal use rather than paying out as dividends to shareholders is known as retained earnings.
• Because the earnings are “ploughed back” into the business to support future expansion, growth, and financial stability, this practice is sometimes referred to as “ploughing back of profit.”