The major types of transactions that affect retained earnings are:
A)paid-in capital and common stock.
B)assets and liabilities.
C)revenues,expenses,and dividends.
D)revenues and liabilities.

Question

Quizplus · Accepted Answer

Retained earnings are affected by revenues, expenses, and dividends. When a company earns revenues, it increases retained earnings. When it incurs expenses, it decreases retained earnings. Dividends also reduce retained earnings, as they represent a distribution of profits to shareholders. Therefore, option C is the correct answer. Options A, B, and D are not correct, as paid-in capital, common stock, assets, and liabilities do not directly affect retained earnings.

The Major Types of Transactions That Affect Retained Earnings Are