Paper 2 · retained profit
State the term for the part of a business's profit, after tax, that is kept in the business instead of being taken out as drawings or paid out as dividends.
Model answer
retained profit
Also accepted: retained profits, retained earnings, ploughed back profit, ploughed-back profit
Explanation: Retained profit is profit the owners leave in the business rather than withdrawing it. Because it belongs to the business already, it is an internal source of finance and costs no interest, which is why it is usually the first source a growing enterprise looks to.
Derived from ZIMSEC Business Enterprise Skills Paper 2, Nov 2020, Q1