Daniel, the owner of a bookstore, decides to reinvest his personal profits from the current fiscal year toward renovating the store and expanding its inventory. In the context of owners' equity, the profits that Daniel reinvests in the bookstore are called:

A. bonus shares.

B. retained earnings.

C. current liabilities.

D. equity releases.

Question

Business

Emily Stout

9 March, 03:10

Daniel, the owner of a bookstore, decides to reinvest his personal profits from the current fiscal year toward renovating the store and expanding its inventory. In the context of owners' equity, the profits that Daniel reinvests in the bookstore are called:

A. bonus shares.

B. retained earnings.

C. current liabilities.

D. equity releases.

+5

Answers (1)

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Madeline · Answer 1

B. retained earnings

Explanation:

Retained earnings -

It refers to the amount of monetary value left on with any business after paying the dividends to the shareholders, is referred to as the retained earnings.

The amount left with the company can be used to reinvest for any other new project, in order to expand the business.

The earnings can be positive as well as negative.

Hence, from the given scenario of the question,

Daniel uses his retained earnings in order to expand his business.