The Retained Earnings statement is based upon which of the following relationships?
A)Retained Earnings - Net Income - Dividends.
B)Retained Earnings - Net Income + Dividends.
C)Retained Earnings + Net Income + Dividends.
D)Retained Earnings + Net Income - Dividends.

Question

Quizplus · Accepted Answer

The Retained Earnings statement is based on the relationship between the beginning balance of retained earnings, which is carried over from the previous period, and the changes that have occurred during the current period. These changes include net income earned during the period, as well as any dividends paid to shareholders. The formula for the Retained Earnings statement is: Beginning Balance of Retained Earnings + Net Income – Dividends = Ending Balance of Retained Earnings. Therefore, the best choice is D.

The Retained Earnings Statement Is Based Upon Which of the Following