Question

Retained earnings are ................. source of financing. 
internal

external

additional


​

Answer 1

Answer:

External is the correct answer

Answer 2

Answer:

A. Debenture

B. Equity share capital

C.preference share

D.retained earning

Explanation:

Retained earnings

The portion of net profit distributed to share holders is called dividended and the remaining portion of the profit is called retained earning . In other word, the amount of undistributed profit which is available for investment is called retained earning. Retain earning is considered as internal source of long term financing and it is a part of shareholders equity. Generally retained earning is considered as cost free source of financing.It is because neither dividend nor interest is payable on retained profit.