PDA

View Full Version : What is the relationship between retained and cash? And give a concept.


Marie1964
Feb 5, 2011, 12:19 PM
Sid Alvarez, another accounting student in your class, is very confused about retained earnings. He cannot understand why it is not the same as cash. He makes comments such as “Isn't retained earnings like a bank account that you can withdraw from?” and “After all, isn't it true that if there are no retained earnings, there are no dividends?” Give an answer to address Sid's confusion. Support your answer with at least one accounting concept.