Which of the following would most likely increase retained earnings?
Posted: Sat Aug 07, 2021 6:54 am
A) An increase in expenses.
B) An increase in revenues.
C) Declaring a cash dividend.
D) Issuing additional common stock.
Answer: B
Explanation: Net income increases retained earnings. Increased revenue, given a fixed expense
amount, would increase net income. An increase in expenses and declaring a cash dividend both
decrease retained earnings.
B) An increase in revenues.
C) Declaring a cash dividend.
D) Issuing additional common stock.
Answer: B
Explanation: Net income increases retained earnings. Increased revenue, given a fixed expense
amount, would increase net income. An increase in expenses and declaring a cash dividend both
decrease retained earnings.