The amount shown on the December 31, 2012 balance sheet as "retained earnings" is equal to the firm's net income for 2012 minus any dividends it paid.

Question

Quizplus · Accepted Answer

Retained earnings is the cumulative amount of net income that a company has retained over time, after dividends have been paid. It is not equal to the net income for only one year minus dividends paid in that year.

The Amount Shown on the December 31, 2012 Balance Sheet