retained earnings is which fund
Answers
Step-by-step explanation:
Retained earnings are hold back after paying dividend, anything after the net profit is owner's fund and owner's fund is a part of liability. Retained earnings are not considered as assets in itself but are used to buy future assets for the company or to realize the liabilities.
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Answer:
In order for a company to grow, develop and expand it is ideal to use retained earnings for the accumulation of assets that generate income. The generation of income gives more cash flow to the company which gives means for expansion as well as increase its research and development programs. The increase in cash flow of the company helps to improve financial status and makes it favorable in eyes of investor. Retained earnings is favorable for the companies as issuing of new capital is a lengthy process as well as includes several costs, financial obligation and increased risk.
therefore retained earning is owners fund