Which of the following statements regarding net income transferred to retained earnings is correct?and why


Net income = net income transferred to retained earnings - dividends
Net income transferred to retain earnings = net income + dividends
Net income = net income transferred to retain earnings + dividends
Net income transferred to retain earnings - net income = dividends

Retained Earnings is a Balance Sheet account.

Net income is the difference of Revenues & Expenses from the Income Statement and is transferred into the Retained Earnings Account less any dividends paid to shareholders.

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