Ending Retained Earnings for a Period Is Equal to Beginning

question 115

Multiple Choice

Ending retained earnings for a period is equal to beginning

• A)Retained earnings + Net income + Dividends.
• B)Retained earnings - Net income - Dividends.
• C)Retained earnings + Net income - Dividends.
• D)Retained earnings - Net income + Dividends.

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Definitions:

Retained Earnings

The portion of net income that is not distributed to shareholders as dividends but is retained by the company to reinvest in its core business or to pay debt.

Reported Net Income

The total profit or loss of a company after all expenses and taxes have been subtracted from total revenue, as shown on the income statement.

Direct Method

An approach to preparing the cash flow statement where actual cash inflows and outflows from operational activities are listed.

Net Cash Flow

It is the difference between a company's cash inflows and outflows within a specified period, indicating the company's liquidity position.