Which of the Following Would Require a Debit to the Retained

question 102

Multiple Choice

Which of the following would require a debit to the Retained Earnings account for a corporation?

• A) The initial investment of stockholders
• B) Net income of the period
• C) Net loss of the period
• D) Contributions by new stockholders

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Definitions:

Equity Method

An accounting technique used by a company to record its investment in another company when it has significant influence but not full control.

Unamortized

Describes a portion of a loan or bond or other asset that has not yet been written off or paid down through periodic payments.

Patents

Legal rights granted to inventors, allowing them exclusive use and exploitation of their inventions for a certain period.

Unrealized Intercompany Profits

Profits arising from transactions between entities within the same group that have not yet been realized by selling the goods or services to an external party.