Assume That the Balance in Retained Earnings at the End

question 5

Multiple Choice

Assume that the balance in Retained Earnings at the end of year is $100,000, and that it decreased by 15% during the year. The balance in Retained Earnings at the beginning of the year was closest to:

• A)$120,000.
• B)$117,647.
• C)$115,000.
• D)$ 85,000.

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Definitions:

Trust

A provision in equity whereby one person transfers property to a second person obligated to use it to the benefit of a third person.

Involuntary Assignment

Assignment of rights that takes place involuntarily, as in the cases of death and bankruptcy.

Equity Provision

A clause in an agreement that allows for adjustment based on the equity value of an entity or asset.

Contract Terms

The specific provisions, conditions, and stipulations that define the agreement and obligations between parties in a contract.