The ending balance of the retained earnings account appears in
A) both the statement of stockholders' equity and the income statement
B) only the statement of stockholders' equity
C) both the statement of stockholders' equity and the balance sheet
D) both the statement of stockholders' equity and the statement of cash flows

Question

Quizplus · Accepted Answer

The ending balance of the retained earnings account is reported in both the statement of stockholders' equity and the balance sheet. The statement of stockholders' equity shows the changes in the retained earnings account during the year, while the balance sheet shows the ending balance of the retained earnings account as part of the total equity of the company. The income statement shows the net income, which is used to calculate the change in retained earnings, but does not include the ending balance of the retained earnings account. The statement of cash flows shows the cash transactions of the company, but does not include the ending balance of the retained earnings account.

The Ending Balance of the Retained Earnings Account Appears in