Which of the following transactions would NOT result in an increase to retained earnings?
A)correction of an error in which expenses were overstated in a previous year
B)issuance of a 3-for-1 stock split
C)reacquisition of shares for less than the original issue price
D)earning of net income for the period

Question

Quizplus · Accepted Answer

A stock split does not impact the earnings of the company. It only changes the number of shares outstanding and their value, but does not affect the company's net income or retained earnings. The other choices result in an increase to retained earnings: A) correcting an overstatement of expenses increases retained earnings by decreasing the accumulated deficit caused by the error, C) reacquiring shares for less than the original issue price increases retained earnings by reducing the total equity balance, and D) earning net income for the period increases retained earnings by adding to the accumulated profits of the company.

Which of the Following Transactions Would NOT Result in an Increase