Which one of the following equations represents the statement of retained earnings activity?

Question

Quizplus · Accepted Answer

Retained earnings represent the cumulative amount of earnings that have been retained by the company instead of being paid out as dividends. The equation that represents the statement of retained earnings activity is: Beginning retained earnings + net income - dividends = ending retained earnings. This is because the retained earnings at the beginning of the period are added to the net income earned during the period and any dividends paid are deducted to arrive at the ending balance of retained earnings for the period. Thus, option D is the correct answer.

Which One of the Following Equations Represents the Statement of Retained