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3. Retained Earnings

in Chapter 1 (Problem 3 of 10)

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 1 Problems at Once View
1 Current Assets Easy
2 Matching Basic Vocabulary Easy
3 Retained Earnings
You are here. 		Easy
4 Account Classifications Moderate
5 Solving for Missing Amounts Moderate
6 Solving for Net Income Moderate
7 Tying the Statements Together Moderate
8 Account Classifications Hard
9 Calculating Operating Income Hard
10 Solving for Retained Earnings Hard

Chapter 1 Videos

1 The Accounting Equation 3:02
2 Assets vs Liabilities 5:32
3 Shareholder's Equity 5:26
4 The Balance Sheet 5:52
5 The Statement of Retained Earnings 5:51
6 The Income Statement 6:19
7 The Statement of Cash Flows 6:02
8 How the Statements Work Together 9:02
9 Current Assets 9:57
10 Non-Current Assets 10:25
11 Current Liabilities 6:24
12 Non-Current Liabilites 2:00
13 Contributed Capital 5:10
14 The Classified Balance Sheet 4:48
15 The Multistep Income Statement 12:44
16 Retained Earnings vs Shareholder's Equity 6:41
Chapter 2 →