Retained earnings at the end of the year is calculated using:
A)Beginning retained earnings,net income,and dividends.
B)Common stock and dividends.
C)Stockholders' equity,net income,and dividends.
D)Net income and dividends.

Question

Quizplus · Accepted Answer

Retained earnings at the end of the year is calculated by adding the net income of the year to the beginning balance of retained earnings and then subtracting any dividends paid to the shareholders. Therefore, option A is the only one that includes all the necessary components to calculate retained earnings at the end of the year, which are beginning retained earnings, net income, and dividends. Options B, C, and D only offer partial information or other unrelated components.

Retained Earnings at the End of the Year Is Calculated