A Company Had a Net Loss of $1,200 During the Year

question 27

Multiple Choice

A company had a net loss of $1,200 during the year and paid dividends of $700. If the beginning of year addition to retained earnings was $8,400, what was the amount of retained earnings on the balance sheet at the end of the year?

• A) $10,300
• B) $9,600
• C) $8,900
• D) $6,500
• E) $9,100

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Definitions:

Diversification

The process of allocating investments among various financial assets to reduce risk and improve potential returns.

Diversifiable Risk

A risk that can be reduced or mitigated through the diversification of investments in a portfolio.

Government Regulation

Laws and rules established by governmental agencies aimed at controlling the way businesses can operate within the economy.

Systematic Risk

A hazard inherent to the entire market or a market segment, which diversification cannot diminish.