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    purplejewels's Avatar
    purplejewels Posts: 2, Reputation: 1
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    #1

    Sep 27, 2009, 05:23 PM
    Retained earings
    Which of the following must be added to beginning Retained Earnings to compute ending Retained Earnings?
    Net income
    Expenses
    Dividends
    All of these answers are correct.

    I am thinking it is net income but need to be sure thanks for your help
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Sep 27, 2009, 06:24 PM

    That's correct. Revenues increase retained earnings, expenses decrease it, and dividends decrease it. That eliminates expenses and dividends.

    Since net income is the amount by which revenues are bigger than expenses, then that is an increase.
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