Which One of the Following Equations Represents Retained Earnings Activity

question 43

Multiple Choice

Which one of the following equations represents retained earnings activity?

• A) Beginning balance + net income + dividends = profits for the year
• B) Beginning balance + cash inflows - cash outflows = ending balance
• C) Beginning balance + dividends - net income = ending balance
• D) Beginning balance + net income - dividends = ending balance

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Definitions:

Post-closing Trial Balance

A trial balance prepared after closing entries are made, used to check the balance of debits and credits have been maintained throughout the period after all closing entries are completed.

Financial Statements

Comprehensively prepared records presenting the financial activities and position of a business, person, or entity.

Work Sheet

A document used by accountants to prepare adjusting entries and to draft a company's financial statements, summarizing all of the ledger account balances.

Liabilities

Financial obligations or debts owed by a company to creditors or suppliers.