Which Of The Following Is Likely To Be Found On A Statement Of Retained Earnings

The correct option is A), as the Statement of Retained Earnings include Net Income (Loss) for the current accounting period, Opening Retained Earnings (from previous year), Dividend paid to shareholders / stockholders and Retained Earnings at the end of the period.

Net Income for the year is added to Opening RE while net loss for the year is deducted from opening RE. Dividend paid is deducted from opening RE to calculate closing Retained Earnings for the current year.

The calculated value of RE is the amount of profit remained in the business and can be utilized for different purposes such as for functioning business activities, for example, financing a company’s project or purchasing expensive assets, etc. RE is used to grow the business. However, Retained loss indicates that the company has not enough money to reinvest and has debts which has not been paid during the current accounting period.