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Net Income and Dividends
The income statement of a corporation for the month of February indicates a net income of $32,000.
During the same period, $40,000 in cash dividends were paid, which of the following statements is true?
a.The business incurred a net loss of $8,000 during the month.
b.Retained earnings has decreased by $8,000.
c.Liabilities have increased by $8,000.
d.The accounting equation is not balanced for the period.
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