Which one of the following equations represents retained earnings activity?
A) Beginning balance + net income + dividends = profits for the year
B) Beginning balance + cash inflows - cash outflows = ending balance
C) Beginning balance + dividends - net income = ending balance
D) Beginning balance + net income - dividends = ending balance

Question

Quizplus · Accepted Answer

Retained earnings activity involves the beginning balance of retained earnings, net income earned during the period, and any dividends paid out to shareholders. The equation in option D, Beginning balance + net income - dividends = ending balance, represents this activity.

Which One of the Following Equations Represents Retained Earnings Activity