The Retained Earnings Account Had a Beginning Balance of $60,000

question 6

Multiple Choice

The Retained Earnings account had a beginning balance of $60,000 and an ending balance of $70,000. If $20,000 of dividends were declared and paid during the period, net income must have been:

• A) $20,000.
• B) $30,000.
• C) $10,000.
• D) $50,000.

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Definitions:

Generally Accepted Accounting Principles

A collection of commonly-followed accounting rules and standards for financial reporting.

Financial Statement Formats

The specific layout and organization of information within financial documents, such as balance sheets and income statements, which comply with accounting standards.

Cash Flow Statement

A financial document that shows the amount of money a business has on hand at the beginning of a time period, receipts coming into the business, and money going out of the business during the same period.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and profits.