If retained earnings increases from the beginning of the year to the end of the year, then:Group of answer choicesdividends paid are greater than profit.profit is greater than dividends paid.additional investments are less than losses.profit is less than dividends paid.
Question
If retained earnings increases from the beginning of the year to the end of the year, then:Group of answer choicesdividends paid are greater than profit.profit is greater than dividends paid.additional investments are less than losses.profit is less than dividends paid.
Solution
If retained earnings increases from the beginning of the year to the end of the year, then profit is greater than dividends paid. This is because retained earnings are a part of the company's net income that is retained by the company after it has paid out dividends to its shareholders. So, if retained earnings are increasing, it means the company is retaining more of its profits, which indicates that the profit is greater than the dividends paid.
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