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Net Income and Dividends The income statement of a corporation for the month of February indicates a net income of $42,000. During the same period,
Net Income and Dividends
The income statement of a corporation for the month of February indicates a net income of $42,000.
During the same period, $52,000 in cash dividends were paid. Which of the following statements is true?
a. The business incurred a net loss of $10,000 during the month.
b. Retained earnings has decreased by $10,000.
c. Liabilities have increased by $10,000.
d. The accounting equation is not balanced for the period.
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