The change in retained earnings of a firm is found by subtracting _____ from the net income.
A) dividends paid to shareholders
B) stockholders' equity
C) cost of goods sold
D) cash payments to purchase securities

Question

Quizplus · Accepted Answer

Retained earnings represent the cumulative earnings kept by the company after paying dividends to shareholders. Therefore, the change in retained earnings is found by subtracting the dividends paid to shareholders from the net income.

The Change in Retained Earnings of a Firm Is Found