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Which item must be included even when it is not distributed to shareholders?

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Question

Which item must be included even when it is not distributed to shareholders?

Options

  • Interest on national debt

  • Gifts and donations received

  • Retained earnings or undistributed profits

  • Unemployment allowance

MCQ
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Solution

Retained earnings or undistributed profits are part of firms' profits. They are included even if shareholders do not receive them as dividends.

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