Retained Earnings Quiz
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Questions and Answers

Which of the following factors affects retained earnings the most?

  • Net income or loss (correct)
  • Both net income or loss and dividends paid to shareholders equally
  • Number of employees in the company
  • Dividends paid to shareholders

    • What happens to retained earnings when a company has a net loss for the period?

  • It is added to the beginning balance of retained earnings
  • It is divided among shareholders
  • It has no effect on the beginning balance of retained earnings
  • It is subtracted from the beginning balance of retained earnings (correct)

    • How does paying dividends to shareholders affect retained earnings?

  • It increases the number of outstanding shares
  • It adds to the beginning balance of retained earnings
  • It has no effect on the beginning balance of retained earnings
  • It subtracts from the beginning balance of retained earnings (correct)

    • Question 1

    <p>What is the primary factor that affects retained earnings?</p> Signup and view all the answers

    Answer 1

    <p>Net income or loss</p> Signup and view all the answers

    Question 2

    <p>What happens to retained earnings when a company pays dividends to shareholders?</p> Signup and view all the answers

    Answer 2

    <p>The amount of the dividend is subtracted from the beginning balance of retained earnings</p> Signup and view all the answers

    Question 3

    <p>How does a net loss for the period affect retained earnings?</p> Signup and view all the answers

    Answer 3

    <p>The amount of the net loss is subtracted from the beginning balance of retained earnings.</p> Signup and view all the answers

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