Asked by Christa Preville on May 21, 2024
Verified
Which of the following is not correct?
A) 2019 expenses were $43,600.
B) Total liabilities at December 31,2019 were $94,000.
C) Retained earnings increased $33,900 during 2019.
D) Common stock at December 31,2019 was $40,000.
Total Liabilities
The sum of all financial obligations a company owes to outside parties.
Expenses
Costs incurred by a business in the process of earning revenue, including operational costs, salaries, and utilities.
Retained Earnings
Part of a company's profit that is held or retained and saved for future use, reinvestment, or to pay debt rather than being paid out as dividends to shareholders.
- Acquire knowledge of retained earnings and how business activities influence them.
Verified Answer
DS
Davin SawmyMay 25, 2024
Final Answer :
C
Explanation :
Retained earnings increase by the net income minus dividends paid. For 2019, the increase in retained earnings would be $33,900 (net income) - $5,700 (dividends) = $28,200, not $33,900.
Learning Objectives
- Acquire knowledge of retained earnings and how business activities influence them.