The amount by which retained earnings changes is obtained by subtracting
A) any dividends to be paid for that year from net income.
B) net income from EBIT.
C) taxes from EBIT.
D) interest expense from EBIT.
E) EBIT from CGS.

Question

Quizplus · Accepted Answer

Retained earnings change by subtracting dividends paid from net income, as retained earnings are the portion of net income not distributed as dividends.

The Amount by Which Retained Earnings Changes Is Obtained by Subtracting