Which of the following will decrease the balance in Retained earnings?

Question

Quizplus · Accepted Answer

A share split (A) or share issue (B) will not affect the balance in retained earnings as it is related to the number of shares outstanding, not the earnings of the company. Repayment of debenture principal (D) also does not affect retained earnings as it relates to debt, not equity. However, a share dividend (C) is a distribution of earnings to shareholders, thus reducing the balance in retained earnings.

Which of the Following Will Decrease the Balance in Retained