The correct answer is: C. retained earnings
Retained earnings are the accumulated earnings of a company that have not been paid out as dividends to shareholders. They are shown on the balance sheet as a component of shareholders’ equity.
Retained earnings can be used to finance future growth, to pay off debt, or to repurchase shares of stock. They can also be distributed to shareholders as dividends.
Retained earnings are cumulative, which means that they are carried forward from year to year. This means that if a company does not pay out all of its earnings as dividends in a given year, the remaining earnings will be added to the retained earnings balance for the next year.
The following are the other options and their explanations:
- A. non-paid earnings is not a correct answer because it is not a specific term used in accounting.
- B. common earnings is not a correct answer because common earnings are the earnings that are available to be distributed to all shareholders, including both common and preferred shareholders.
- D. preferred earnings is not a correct answer because preferred earnings are the earnings that are available to be distributed to preferred shareholders only.