Question

Retained earnings:___________.

1. Are never adjusted for anything other than net income or dividends.
2. Can only be appropriated by setting aside a cash fund.
3. Generally consists of a company's cumulative net income less any net losses and dividends declared since its inception.
4. Represent an amount of cash available to pay shareholders.
5. Represents the amount shareholders are guaranteed to receive upon company liquidation.

Answer 1

3. Generally consists of a company's cumulative net income less any net losses and dividends declared since its inception.

Step-by-step explanation:

Retained earnings or retained earnings are those benefits that the company has earned and that instead of distributing among the shareholders, they decide to invest in the company itself.

These earnings can be used to achieve further growth of the company, such as increasing the workforce, improving the budget dedicated to research or to obtain a liquidity fund that allows the company to correct possible emergency situations in the future.