If the Retained Earnings Account Increases from the Beginning of the Year

question 106

Multiple Choice

If the retained earnings account increases from the beginning of the year to the end of the year, then

• A) profit is greater than dividends.
• B) dividends were paid.
• C) additional investments are less than reported losses.
• D) a loss is less than dividends.

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Definitions:

Retained Earnings

Profits that a company has earned to date, less any dividends or other distributions paid to investors.

Economic Resource

A resource with the ability to produce economic benefits for its holder, typically assets owned by an individual or entity.

Depreciated

Refers to the reduced value of an asset after accounting for depreciation expenses over time due to use, wear and tear, or obsolescence.

Accounting Periods

Specific spans of time for which financial reports are prepared, usually quarterly or annually.