In a company balance sheet, the balance of retained earnings at the end of the period is equal to:
A) profit for the period.
B) retained earnings at the beginning of the period plus profit minus dividends declared.
C) retained earnings at the beginning of the period plus profit.
D) profit less losses.

Question

Quizplus · Accepted Answer

Retained earnings at the end of the period is calculated by adding retained earnings at the beginning of the period to the profit for the period, and then subtracting any dividends declared during the period. This is because retained earnings represent the portion of a company's profits that have been kept, or "retained," instead of being paid out to shareholders as dividends.

In a Company Balance Sheet, the Balance of Retained Earnings