At the start of the first year of operations,retained earnings on the balance sheet would be:
A)equal to zero.
B)equal to contributed capital.
C)equal to stockholders' equity.
D)equal to the net income.

Question

Quizplus · Accepted Answer

Retained earnings are the accumulation of a company's net income over time, minus any dividends paid to shareholders. Since the company is just starting operations, there would be no net income or dividends paid yet, so the retained earnings balance would be zero.

At the Start of the First Year of Operations,retained Earnings