The Statement of Retained Earnings Shows How Retained Earnings Have

question 63

True/False

The statement of retained earnings shows how retained earnings have changed from one accounting period to the next. By subtracting dividends paid to shareholders from net income, managers will see changes in this statement over time.

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Definitions:

Shareholders

Individuals or entities that own one or more shares of stock in a corporation, making them partial owners of that company.

Compensation

Payment awarded to someone in exchange for loss, suffering, or for performed services.

Dissolution

The change in the relation of partners caused by any partner’s ceasing to be associated with the carrying on of the partnership’s business.

Board of Directors

A group of individuals elected to represent shareholders and direct the affairs of a corporation, setting its strategic direction.