Retained earnings at the end of the period is equal to
A)retained earnings at the beginning of the period plus profit minus liabilities.
B)retained earnings at the beginning of the period plus profit minus dividends.
C)profit for the period.
D)assets plus liabilities.

Question

Quizplus · Accepted Answer

Retained earnings at the end of the period is calculated by adding the retained earnings at the beginning of the period to the profit earned during the period and then subtracting any dividends paid out to shareholders. Therefore, option B is the correct answer. Option A includes liabilities which is not included in the calculation of retained earnings. Option C only includes the profit for the period and does not take into account the retained earnings at the beginning of the period. Option D is not relevant to the calculation of retained earnings.

Retained Earnings at the End of the Period Is Equal