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

question 5

Multiple Choice

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

• A) net income is less than dividends.
• B) net loss is less than dividends.
• C) the company must have sold shares.
• D) net income is greater than dividends.

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Definitions:

Average Revenue

The amount of income generated per unit of sale or the total revenue divided by the quantity of products or services sold.

Marginal Revenue

The income boost obtained through the sale of one extra unit of a product or service.

Pure Competition

A market structure characterized by an extremely high level of competition, where no single buyer or seller can influence the market price.

Advertising

The activity or profession of producing advertisements for commercial products or services to influence consumer behavior.