The change in retained earnings can be calculated as follows:
A)Net income - dividends
B)Net income + dividends
C)Net income - interest
D)Net income + interest

Question

Quizplus · Accepted Answer

Retained earnings represent the portion of net income that a company has kept in the business after paying dividends to shareholders. Therefore, the change in retained earnings is equal to net income minus dividends paid to shareholders.

The Change in Retained Earnings Can Be Calculated as Follows