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3. Retained Earnings

in Chapter 2 (Problem 3 of 6)

Which of the following would increase retained earnings?

  1. an increase to an expense account.
  2. an increase to a revenue account.
  3. a cash dividend being declared and paid to stockholders.
  4. issuance of additional shares of common stock.
Watch Solution (1:34) Hide Solution Reveal Solution

An increase in a Revenue account increases Net Income, which in turn would increase Retained Earnings.

The Rest Of The Practice Problems

Click Here to View All Chapter 2 Problems at Once View
1 Current Assets Easy
2 Effect on the Current Ratio Easy
3 Retained Earnings
You are here. 		Easy
4 Solving for Missing Amounts Moderate
5 Account Classifications Hard
6 Calculating Operating Income Hard
← Chapter 1

Chapter 2 Videos

1 Current Assets 9:57
2 Non-Current Assets 10:25
3 Current Liabilities 6:24
4 Non-Current Liabilites 2:00
5 Contributed Capital 5:10
6 The Classified Balance Sheet 4:48
7 The Multistep Income Statement 12:44
8 Retained Earnings vs Shareholder's Equity 6:41
9 Ratios: Working Capital 2:29
10 Ratios: Current Ratio 4:00
11 Gross Profit vs Net Profit 6:15
12 Profit Margin 3:22
Chapter 3 →