Practice Quiz

FINRA Series 7

Category - Series 7

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In a corporation’s financial statements, earned surplus is also recognized as:
  1. gross profit
  2. operating income after payment of interest expense
  3. earnings retained after payment of dividends to shareholders
  4. net income
Explanation
Answer: C - earnings retained after payment of dividends to shareholders. The other choices are clearly incorrect. Earned surplus is also referred to as retained earnings.
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