The Flying High Company recorded a net profit for the year but paid no dividends. Comparing the balance sheet at the end of the year with the one at the beginning of the year, which of the following must be true?
A) Current assets would be higher.
B) Non-current assets would be higher.
C) Liabilities would be higher.
D) Shareholders' equity would be higher.

Question

Quizplus · Accepted Answer

Since no dividends were paid, the net profit for the year would have been retained in the company, increasing the shareholders' equity. Therefore, choice D is the correct answer. Choices A, B, and C are not necessarily true based on the information given.

The Flying High Company Recorded a Net Profit for the Year