Which of the Following Statements Regarding Net Income Transferred to Retained

question 58

Multiple Choice

Which of the following statements regarding net income transferred to retained earnings is correct?

• A) Net income = net income transferred to retained earnings - dividends
• B) Net income transferred to retain earnings = net income + dividends
• C) Net income = net income transferred to retain earnings + dividends
• D) Net income transferred to retain earnings - net income = dividends

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Definitions:

Adjusting Entries

At the close of a financial period, journal entries are created to distribute earnings and costs to the period in which they genuinely took place.

Adjusted Trial Balance

is a listing of all company accounts that will appear on the financial statements after making end-of-period adjustments.

Reversing Entry

An accounting entry made at the beginning of an accounting period to reverse or cancel out a previous adjusting entry.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate revenues and expenses to the period in which they actually occurred.