In preparing a statement of retained earnings, a company needs to know its
A)prior-period adjustments, net income (loss), and dividends
B)comprehensive income and prior-period adjustments
C)comprehensive income, dividends, and prior-period adjustments
D)dividends and prior-period adjustments

Question

Quizplus · Accepted Answer

A statement of retained earnings requires information about prior-period adjustments (corrections for accounting errors and other adjustments), net income (or loss) for the current year, and dividends paid out to shareholders. Comprehensive income, while an important financial metric, is not required for the preparation of a statement of retained earnings.

In Preparing a Statement of Retained Earnings, a Company Needs