After a profitable year, a limited company decides to retain some earnings rather than distribute them all as dividends. This retained profit is recorded in which account?

Question

After a profitable year, a limited company decides to retain some earnings rather than distribute them all as dividends.  This retained profit is recorded in which account?

Answer

Appropriation account (shows profit distribution)

Answer

Profit and loss account (accumulated income statement)

Answer

Share capital account (represents shareholder investment)

Answer

Reserves account (stores retained profits)

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After a profitable year, a limited company decides to retain some earnings rathe...

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