Question

In a statement of retained earnings, decreases in retained earnings result from ________.

a. revenues earned
b. net income
c. issuance of stock
d. net losses

Answer 1

Answer: b

Step-by-step explanation:

Retained earnings are affected by any increases or decreases in net income and dividends paid to shareholders. As a result, any items that drive net income higher or push it lower will ultimately affect retained earnings.