Answer:
A) Generally consists of a company's cumulative net income less any net losses and dividends declared since its inception.
Explanation:
retained earnings = net income after taxes - distributed dividends
Retained earnings is a permanent account in the balance sheet, and it increases depending on the amount of net income - dividends, or decreases when the company has a net loss. Generally, companies will not distribute dividends when they have a net loss, although the law allows them to do so as long as they have a credit balance in retained earnings. The dividends that a company distributes come form net income or retained earnings.
Retained earnings can also be adjusted when repurchasing and reselling treasury stock generates a loss which is larger than additional paid-in capital in excess of par value.
