which of the following statements is true?\na. dividends reduce net income.\nb. dividends increase retained…

Brief Explanations:

Dividends are payments made by a corporation to its shareholders out of its earnings or reserves. Net - income is calculated before dividends are distributed, so dividends do not reduce net income. Retained earnings are the portion of net income that is kept by the company instead of being distributed as dividends. When dividends are paid, retained earnings decrease. Dividends are not considered business expenses as they are not incurred in the normal course of operations to generate revenue.

Answer:

D. Dividends reduce retained earnings.