Question

which of the following always increases during periods of a positive net income? dividends retained earnings shareholder’s capital

Explanation:

Positive net income contributes to retained earnings (net income minus dividends). Even if dividends are paid, retained earnings increase if net income exceeds dividends, and always increase if no dividends are paid. Dividends are discretionary, not guaranteed to increase. Shareholder’s capital (e.g., common stock) is unrelated to current net income. Thus, retained earnings always increase with positive net income.

Answer:

retained earnings