Questions: The statement of retained earnings explains changes in equity from net income (or loss) and from any dividends over a period of time. (Select the accounts below which will correctly complete this question.) - liabilities - revenues - dividends

The statement of retained earnings explains changes in equity from net income (or loss) and from any dividends over a period of time. (Select the accounts below which will correctly complete this question.) - liabilities - revenues - dividends
Transcript text: AA learning.mheducation.com Mc Sraw Hill Exit Assignment 33 of 39 Concepts completed (i) Multiple Choice Question The statement of retained earnings explains changes in equity from net income (or loss) and from any $\qquad$ over a period of time. (Select the accounts belo which will correctly complete this question.) liabilities revenues dividends Need help? Review these concept resources. Read About the Concept Rate your confidence to submit your answer. High Medium Low O 2024 McGraw Hill. All Rights Reserved. Privacy Center Terms of Use
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Solution

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The answer is the third one: dividends.

Explanation for each option:

  1. Liabilities: This is incorrect. Liabilities refer to what the company owes to others, such as loans or accounts payable. They do not directly affect the retained earnings statement, which focuses on equity changes due to net income and dividends.

  2. Revenues: This is incorrect. Revenues are the income generated from normal business operations. While revenues do affect net income, they are not directly mentioned in the statement of retained earnings. The statement of retained earnings specifically explains changes in equity from net income (or loss) and dividends.

  3. Dividends: This is correct. Dividends are distributions of a portion of a company's earnings to its shareholders. They directly reduce retained earnings, which is why they are included in the statement of retained earnings.

Summary: The statement of retained earnings explains changes in equity from net income (or loss) and from any dividends over a period of time.

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