Which of the following events will cause retained earnings to increase?
A)Dividends declared by the Board of Directors.
B)Net income reported for the period.
C)Net loss reported for the period.
D)Issuance of stock in exchange for cash.

Question

Quizplus · Accepted Answer

Net income reported for the period will increase retained earnings, as it represents the amount of profits earned by the company that have not been distributed as dividends. The other choices will decrease retained earnings: A) dividends declared will decrease the amount of retained earnings, C) net loss will decrease the amount of retained earnings, and D) issuance of stock in exchange for cash will not affect retained earnings directly.

Which of the Following Events Will Cause Retained Earnings to Increase