Asked by Marlon Amador on May 10, 2024
Verified
A company's retained earnings balance increased $50,000 last year;therefore,net income last year must have been $50,000.
Net Income
The total earnings of a company after deducting all expenses, taxes, and losses from total revenue.
- Ascertain accumulated earnings by utilizing primary financial information.
Verified Answer
YK
Yaseen KhichiMay 13, 2024
Final Answer :
False
Explanation :
Retained earnings can increase due to factors other than just net income, such as asset sales or changes in accounting policies. Therefore, it is not necessarily true that net income must have been $50,000 if the retained earnings balance increased by that amount.
Learning Objectives
- Ascertain accumulated earnings by utilizing primary financial information.