Final answer:
Retained earnings at the end of a period are calculated by adding the net income to the beginning retained earnings and subtracting dividends. In accounting, T-accounts visually represent transactions, with assets on the left side and liabilities on the right. The net worth of a bank, considered part of liabilities in a T-account, equals total assets minus total liabilities.
Step-by-step explanation:
The correct answer to the student's question is option B: Retained earnings at the end of the period is equal to retained earnings at the beginning of the period plus net income minus dividends. Retained earnings represent the portion of net income that is kept by the company rather than being paid out as dividends to shareholders. Net income is usually reported on a firm's income statement and then transferred to the retained earnings account, which is part of the equity section on the balance sheet. When dividends are declared, they are deducted from the retained earnings balance.
The T account is a visual representation used in accounting to depict the dual effect of transactions on individual accounts. The 'T' separates assets on the left side from liabilities on the right. For banks, assets include reserves, loans, and securities, while liabilities include customer deposits. The sum of the total assets minus total liabilities is known as the net worth or equity of the bank, which sits on the liabilities side in a T-account and offsets the assets to make the account balance.