Which of the following would not affect the balance of the Retained Earnings account?
A)Profit
B)Stock dividend
C)Stock split
D)Cash dividend

Question

Quizplus · Accepted Answer

A stock split would not affect the balance of the Retained Earnings account because a stock split simply increases the number of outstanding shares while decreasing the value of each share proportionally. It does not involve the payment or distribution of any earnings, therefore it does not impact the Retained Earnings account. Profit (A) increases the Retained Earnings account, while both stock dividend (B) and cash dividend (D) decrease the Retained Earnings account by distributing the earnings to shareholders.

Which of the Following Would Not Affect the Balance of the Retained