Why is the following statement true: The retained earnings account?
It isnt true - at least not necessarily. Retained earnings (depending on how your GAAP and company law defines them) are the one thing that is available for distribution as dividends - subject, of course, to potential adjustments for such as intra-group unrealised profits. But your GAAP and company law may not define them in the same way that they are defined in the framework with which I am familiar. Of course, this only applies to individual companies and not the consolidated position. The consolidated retained earnings is just a number.