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1 pts Question 2 [p 492-501] Retained earnings were discussed in the course introductory material and in Chapter 3, and reappear in Chapter 11. Remember
1 pts Question 2 [p 492-501] Retained earnings were discussed in the course introductory material and in Chapter 3, and reappear in Chapter 11. Remember that retained earnings is that portion of net income (earnings) that the company does NOT pay out as dividends, but rather, retains in the company to help it grow. Most of the following statements regarding retained earnings are true. Which statement is FALSE and misleading with regard to retained earnings? If the Board declares a cash dividend to shareholders, the dividend reduces retained earnings, The payment of cash dividends increases a firm's retained earnings Retained earnings consists of the firm's cumulative net income, less any dividends declared since the firm's inception The Statement of Retained Earnings serves as a "bridge between the Income Statement and the Balance Sheet; net income (from the income statement) becomes part of retained earnings in the equity section of the balance sheet
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