Accounting earnings equal

Name: Accounting earnings equal
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Accounting earnings refer to the net income of a company, which is calculated as revenues minus expenses. Dividends are a distribution of profits to shareholders and are not included in the calculation of net income. Therefore, accounting earnings are equal to the change in book value of equity (which reflects the change in net assets of the company) plus dividends paid to shareholders.

Accounting Earnings Equal