Sweet Tree Cookies has current net income of $268,000 of which $110,000 was paid out in dividends. The remaining $158,000 will be shown in which account on the firm's financial statements for next year?
A)long-term debt
B)common stock
C)net income
D)retained earnings
E)paid in surplus

Question

Quizplus · Accepted Answer

The remaining net income of $158,000 will be shown in the retained earnings account on the firm's financial statements for next year. Retained earnings represent the portion of net income that is kept by the company for future use rather than being paid out as dividends to shareholders.

Sweet Tree Cookies Has Current Net Income of $268,000 of Which