The addition to retained earnings for the financial planning period is equal to:
A) Net Income + Taxes - Dividends.
B) Net Income - Dividends.
C) Net income + Depreciation - Dividends.
D) Sales - Dividend.

Question

Quizplus · Accepted Answer

Retained earnings increase by the amount of net income after dividends have been subtracted. This is because retained earnings represent the portion of net income that is not distributed to shareholders as dividends.

The Addition to Retained Earnings for the Financial Planning Period