At the End of the Year, Retained Earnings Totaled $1,700

question 28

Multiple Choice

At the end of the year, retained earnings totaled $1,700. During the year, net income was $250, and dividends of $120 were declared and paid. Retained earnings at the beginning of the year totaled:

• A) $2,070
• B) $1,330
• C) $1,230
• D) $1,570

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Definitions:

Rescission

A remedy in contract law that annuls the agreement, returning both parties to their respective positions prior to the contract being made.

Liquidated Damages

A contractual provision that specifies a predetermined amount of money that must be paid as damages for failure to perform certain aspects of a contract.

Mitigate

To lessen a loss, for example, by victims of a breach, who have a duty to take all reasonable steps to minimize losses suffered.

Specific Performance

A legal remedy in contracts law requiring a party to fulfill their obligations under the contract, as opposed to paying damages.