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

question 52

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)a loss is less than dividends.
• C)additional investments are less than reported losses.
• D)no dividends were paid.

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Definitions:

Market Value

The current price at which an asset or service can be bought or sold in the market, determined by supply and demand dynamics.

EBIT

EBIT stands for Earnings Before Interest and Taxes, a measure of a company's profitability that excludes interest and income tax expenses.

Debt

Money owed by one party, the borrower, to a second party, the lender; it is often represented by loans or bonds.

Capital Structure

The mix of a company's long-term debt, specific short-term debt, common equity, and preferred equity which funds its overall operations and growth.