The Amount by Which Retained Earnings Changes Is Obtained by Subtracting

question 12

Multiple Choice

The amount by which retained earnings changes is obtained by subtracting

• A) any dividends to be paid for that year from net income.
• B) net income from EBIT.
• C) taxes from EBIT.
• D) interest expense from EBIT.
• E) EBIT from CGS.

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Definitions:

Convergent Thinking

A cognitive process in which a person attempts to find a single, correct answer to a problem.

Deductive Reasoning

An analytic approach where an outcome is concluded from the synchronization of several bases presumed to be true.

Inductive Reasoning

A method of reasoning in which general conclusions are drawn from specific observations or instances.

Divergent Thinking

An approach or technique adopted to produce innovative ideas through the examination of numerous potential answers.