Final answer:
The balance in retained earnings is not affected by net income, net loss, issuance of common stock, or dividends.
Step-by-step explanation:
The balance in retained earnings is not affected by the issuance of common stock, dividends, or changes in net income or net loss.
Retained earnings is a cumulative amount that represents the cumulative profit or loss that a company has accumulated over time. It is influenced by factors such as net income (profit) or net loss (loss) generated by the company's operations. However, it is not affected by the issuance of common stock or the payment of dividends.
For example, if a company earns a profit (net income) in a given period, the amount is added to the retained earnings. On the other hand, if the company incurs a loss (net loss), the amount is deducted from the retained earnings. However, the issuance of common stock and payment of dividends do not impact the retained earnings balance.