Which of the following statements best describes the relationship between profit for the period and the ending balance in retained earnings?
A)Profit for the period reduces the ending balance of retained earnings.
B)Retained earnings at the end of the period increases the amount of profit.
C)Profit for the period increases the ending balance of retained earnings.
D)Profit for the period has no effect on the ending balance of retained earnings.

Question

Quizplus · Accepted Answer

Profit for the period increases the company's retained earnings, which is the portion of net income that is kept in the company instead of being distributed as dividends. Therefore, choice C- Profit for the period increases the ending balance of retained earnings- is the correct statement.

Which of the Following Statements Best Describes the Relationship Between