The beginning balance of the shareholders' equity account Retained Earnings plus net income from the income statement less dividends equals the ending balance of Retained Earnings.

Question

Quizplus · Accepted Answer

This statement is true as per the accounting equation: Assets = Liabilities + Shareholders' Equity. Retained earnings is a component of shareholders' equity, and it represents the accumulated profits that are not distributed as dividends. Therefore, the beginning balance of Retained Earnings plus net income less dividends should equal the ending balance of Retained Earnings.

The Beginning Balance of the Shareholders' Equity Account Retained Earnings