Respuesta :
Answer:
Answer explained below
Explanation:
In order to prepare the statement of retained earnings, the balance of the RETAINED EARNINGS account balance as well as any debit balance in the DIVIDENDS account is transferred from the adjusted trial balance and is used along with the reported net income (loss) from the Income Statement.
NOTE:
Retained earnings refer to the net income accrued to a business after debiting its dividends to shareholders.
The concept of dividend decision is deciding that whether to distribute the dividend to the shareholders or to invest it further in the business. If decided to distribute then how much dividend must be distributed from the profits. This gave rise to the concept of Retained earnings.
Retained Earnings
- Retained earnings are those earnings which are left from the amount of profits after distributing the dividend to its shareholders. In other words, retained earnings can be said as the net income accrued to a business after distributing the dividend among its shareholders.
- In order to prepare the statement of retained earnings, the balance of the RETAINED EARNINGS account balance as well as any debit balance in the DIVIDENDS account is transferred from the adjusted trial balance and is used along with the reported net income (loss) from the Income Statement.
Therefore , discussed above is the concept of distributing dividend and the effect of retained earnings using adjusted trail balance.
Learn more about retained earnings here:
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