Which of the Following Items Has No Effect on Retained

question 61

Multiple Choice

Which of the following items has no effect on retained earnings?

• A) expenses
• B) dividends declared
• C) revenues
• D) hiring a new employee

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Definitions:

Quality of Income

A measure of the conservatism of a company's earnings with respect to its ability to generate cash flows, indicating the robustness of earnings.

Net Profit Margin

A financial performance ratio, expressed as a percentage, calculating the amount of net income generated as a portion of revenues.

Unearned Revenue

money received by an entity for a service or product to be delivered or performed in the future.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets.