To compute ending retained earnings on the Statement of Retained Earnings:
A)net income is added to the beginning retained earnings and dividends are subtracted from the beginning retained earnings.
B)net income and dividends are both added to beginning retained earnings
C)net loss and dividends are both added to beginning retained earnings
D)net income or net loss does not affect retained earnings.

Question

Quizplus · Accepted Answer

Ending retained earnings is calculated by adding net income to the beginning retained earnings and subtracting dividends from the beginning retained earnings. This is because net income increases the company's earnings, while dividends decrease it.

To Compute Ending Retained Earnings on the Statement of Retained