On the Statement of Retained Earnings

question 67

Multiple Choice

On the statement of retained earnings:

• A)dividends declared increase net income and are added to calculate the end-of-year balance of retained earnings.
• B)dividends declared are subtracted to calculate the end-of-year balance of retained earnings.
• C)dividends declared are not used to calculate the end-of-year balance of retained earnings.
• D)dividends declared are never reported.

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Definitions:

Banks

Financial institutions that accept deposits from the public, offer various financial services, including loans, and ensure economic stability and growth.

U.S. Financial System

The complex of institutions, including banks, securities markets, and regulatory agencies, that facilitate the flow of capital and financial services in the United States.

Central Bank

The primary institution responsible for managing a country's currency, money supply, and interest rates, with a role often including acting as the lender of last resort.

U.S. Federal Reserve

The central banking system of the United States, responsible for monetary policy, regulation of banks, and providing financial services.