The retained earnings account has a beginning balance of $321,975 and an ending balance of $356,413.Net income is $40,251.Which of the following statements is true?
A)$5,813 would be subtracted when determining cash flows from financing activities.
B)$40,251 would be added when determining cash flows from financing activities.
C)$34,438 would be added when determining cash flows from financing activities.
D)$321,975 would be added when determining cash flows from operating activities.

Question

Quizplus · Accepted Answer

The change in retained earnings is due to net income and dividends. The difference between the beginning and ending balance ($356,413 - $321,975 = $34,438) represents dividends paid, which would be subtracted in the cash flows from financing activities.

The Retained Earnings Account Has a Beginning Balance of $321,975