Indicate Whether Each of the Following Statements About Retained Earnings

question 35

Short Answer

Indicate whether each of the following statements about retained earnings is true or false.
_______ a)A dividend paid to stockholders decreases retained earnings.
_______ b)Issuing common stock for cash increases retained earnings.
_______ c)The amount of net income for a period must equal retained earnings.
_______ d)The purchase of a truck decreases retained earnings.
_______ e)The amount of net income for a period increases retained earnings.

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Definitions:

Formal Income Statement

A financial document that provides a detailed report of a company's revenues, expenses, and net income over a specific period.

Worksheet

A paper or digital form used to organize data and calculate figures, often preliminary to the preparation of financial statements.

Operating Expense

A type of expenditure that a business incurs as a result of carrying out its day-to-day operations, excluding the cost of goods sold.