The Retained Earnings Account Has a Beginning Balance of $321,975

question 35

Multiple Choice

The retained earnings account has a beginning balance of $321,975 and an ending balance of $356,413. Net income is $40,251. Which of the following statements is true?

• A) $5,813 would be subtracted when determining cash flows from financing activities.
• B) $40,251 would be added when determining cash flows from financing activities.
• C) $34,438 would be added when determining cash flows from financing activities.
• D) $321,975 would be added when determining cash flow from operating activities.

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Definitions:

Economic Activity

The actions that involve the production, distribution, and consumption of goods and services within an economy.

Aggregate Demand Curve

A graph that shows the relationship between the total quantity of goods and services demanded (from all sectors including household, business, and government) and the price level, all else being equal.

Price Level

A measure of the average of current prices across the entire spectrum of goods and services produced in the economy.

Real GDP

Gross Domestic Product adjusted for inflation, providing a more accurate representation of an economy's size and how it's growing over time.