Question

Which of the following terms best describes the cumulative value of net income or loss not taken out of the business?
(A) Short-term capital.
(B) Contributed capital.
(C) Working capital.
(D) earned capital.

Answer 1

Answer:

(D) earned capital

Explanation:

Earned capital is a company's net income which is maintained as a strategic decision. The organization decides to not distribute the earnings to investors and save the money for future investments, for example. This type of decisions are usually taken by enterprises on the first stages of the business ir order to accumulate capital for future plans.