Retained earnings at the end of the year is calculated using:
A)Beginning retained earnings,net income,and dividends.
B)Common stock and dividends.
C)Stockholders' equity,net income,and dividends.

Question

Quizplus · Accepted Answer

Retained earnings at the end of the year is calculated by adding net income to the beginning retained earnings and subtracting any dividends paid to shareholders during the year. Therefore, choice A is the correct option as it includes these three factors in the calculation. Choices B and C are incorrect as they do not include net income, which is a crucial component in determining retained earnings.

Retained Earnings at the End of the Year Is Calculated