Which Account Does A Corporation Use To Record Earnings Not Yet Distri cbuted To Stockholders
The Account used by a corporation / company to record earnings not yet distributed to stockholders / shareholders during the accounting period is Retained Earnings or Unappropriated Retained Earnings. Due to retained earnings, the company is able attract invest in the company's business as the company has funds to carry on its business activities and operations in case of some losses. The company can also grow or expand its business by utilizing this earnings retained in the business.
From this unappropriated retained earnings, the distribution of earnings made to stockholders / shareholders of a corporation / company during the accounting period is Dividend.
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