The Statement of Cash Flows does not include the change in retained earnings account as it is embedded in the statement itself. Which of the following represents the items in the cash flow statement that, when added together, equals the change in retained earnings?
A) Net income, Stock account changes, Dividends Paid
B) Net income, Stock account changes, Dividends Paid, Dividend Income
C) Net income, Stock account changes, Dividends Paid, Addition to Retained Earnings from Income Statement
D) None of the above

Question

Quizplus · Accepted Answer

The change in retained earnings is calculated by taking net income and subtracting dividends paid. Stock account changes do not directly affect retained earnings.

The Statement of Cash Flows Does Not Include the Change