If the retained earnings account decreases from the beginning of the year to the end of the year, then
A)net income is less than dividends.
B)there was a net income and no dividends.
C)additional investments are less than net losses.
D)net income is greater than dividends.

Question

Quizplus · Accepted Answer

If retained earnings decrease, it means that the company paid out more in dividends than it earned in net income during the year.

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