The funds available with a company after paying all claims including tax and dividend is called _______.

new profit

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net operating profit

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capital profit

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retained earnings

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Solution

The correct option is B retained earnings
A company generally does not distribute all its earnings among the shareholders as dividends. A portion of the net earnings may be retained in the business for use in the future. This is known as retained earnings. It is a source of internal financing or self-financing or ‘ploughing-back of profits’.

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