If the retained earnings account increases from the beginning of the year to the end of the year, then
A) net income is greater than dividends declared.
B) a loss is less than dividends declared.
C) additional investments are less than reported losses.
D) dividends were received.

Question

Quizplus · Accepted Answer

Retained earnings increase when net income exceeds dividends declared, as retained earnings are the cumulative net income minus dividends paid out.

If the Retained Earnings Account Increases from the Beginning of the Year