Question

Which of the following would not appear on the retained earnings statement?

A) Beginning retained earnings balance
B) Net income
C) Service revenue
D) Dividends

Answer 1

Service revenue would not appear on the retained earnings statement, as it is part of the income statement and contributes to net income, which is then used in determining retained earnings.

Step-by-step explanation:

The item that would not appear on the retained earnings statement is C) Service revenue. The retained earnings statement is used to show changes in retained earnings over a specific period. It typically starts with the beginning retained earnings balance, adds net income or subtracts a net loss, and then subtracts any dividends paid to shareholders. Service revenue is an element of the income statement, not the retained earnings statement. It contributes to the calculation of net income, which is then transferred to the retained earnings statement as part of the equity section of the balance sheet.