Practice Quiz

Veterinary Practice Manager

Category - CVPM

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For an incorporated veterinary practice, what are the retained earnings that are recorded in the liabilities section of the American Animal Hospital Association’s (AAHA) chart of accounts?
  1. The amount paid to partners during any given reporting period
  2. The cumulative amount of net profit or net loss that has not been distributed to owners
  3. The cumulative amount of the corporation’s net losses and net income
  4. The amount of money obtained by a corporation on the issuance of its own stock
Explanation
Answer: C- For an incorporated veterinary practice the retained earnings that are recorded in the liabilities section of the American Animal Hospital Association’s (AAHA) chart of accounts are the cumulative amount of the corporation’s net losses and net income. It is separated from Common Stock and Additional Paid-in Capital because it is the money earned from operating, rather than financing.
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