If retained earnings increases from the beginning of the year to the end of the year, then:Group of answer choicesprofit is less than dividends paid.profit is greater than dividends paid.additional investments are less than losses.dividends paid are greater than profit.
Question
If retained earnings increases from the beginning of the year to the end of the year, then:Group of answer choicesprofit is less than dividends paid.profit is greater than dividends paid.additional investments are less than losses.dividends paid are greater than profit.
Solution
If retained earnings increase from the beginning of the year to the end of the year, then the profit is greater than dividends paid.
Here's why:
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Retained earnings are the portion of a company's net income which is kept by the company instead of being paid out as dividends to shareholders.
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If retained earnings increase, it means that the company has made a profit and has chosen to keep some or all of this profit within the company, rather than distributing it to shareholders.
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If the profit was less than the dividends paid, the retained earnings would decrease, not increase,
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