Browning,Inc.had revenues of $234,000,expenses of $175,000,and dividends of $30,000 during 2010.Which of the following statements is correct?

Question

Quizplus · Accepted Answer

Net income is calculated as revenues minus expenses, which gives us $234,000 - $175,000 = $59,000. Dividends do not affect net income, they only reduce retained earnings. Therefore, options A and C are incorrect. Option D states that total retained earnings decreased by $30,000, which is true because dividends reduce retained earnings. However, the question asks for net income, not the change in retained earnings.