Which of the following mathematical expressions calculates a firm's retained earnings at the end of a year?
A)Retained earnings = Beginning balance of retained earnings − Net income in the current year + Net loss in the previous year
B)Retained earnings = Beginning balance of retained earnings + Net income in the current year + Dividends paid in the current year
C)Retained earnings = Beginning balance of retained earnings + Net income in the current year − Dividends paid in the current year
D)Retained earnings = Beginning balance of retained earnings − Net loss in the previous year − Dividends paid in the current year
E)Retained earnings = Beginning balance of retained earnings − Net income in the current year + Dividends paid in the current year

Question

Quizplus · Accepted Answer

To calculate a firm's retained earnings at the end of a year, we need to add the beginning balance of retained earnings to the net income in the current year and subtract the dividends paid in the current year. Therefore, choice C is the correct expression.

Which of the Following Mathematical Expressions Calculates a Firm's Retained