Retained earnings will be reduced by all of the following except
A) revenues
B) expenses
C) dividends
D) all of these

Question

Quizplus · Accepted Answer

Retained earnings represent the portion of a company's profits that are not distributed as dividends but instead are kept in the company for reinvestment or other uses. Retained earnings are reduced by dividends, which are payments made to shareholders, as well as by losses and expenses. However, revenues increase retained earnings by adding to the company's overall profits. Therefore, the best choice is A, as revenues would not reduce retained earnings.

Retained Earnings Will Be Reduced by All of the Following