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It is cash only if it is appropriated as general reserve. Retained Earnings is a "general term" where the earnings are already used for various activities of the business.
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What makes retained earnings go down?
Retained earnings can go down if there is a negative supply of net income, or if more dividends are paid then net income. For example, retained earnings can go down if a company uses leftover cash to pay shareholders for previous years cash holdings.
Can retained earnings be used for cash flow purposes?
yes retained earnings can be used to get more capital for business to smooth out the cash flow problems.
Journal entry to reflect cash dividends from retained earnings?
The name for journal entries that reflect cash dividends from retained earnings is closing entries. This also reflects book value and cash flow.
Where do you enter Retained Earnings on a Cash Flow Statement?
Retained Earnings does not appear on a cash flow statement; however, the net profit or loss for the period (which gets closed to Retained Earnings) is usually the second item on the cash flow report. Beginning Cash Balance is the first. Then, all the cash changes on the Balance Sheet (such as reduction of debt) and the non-cash items on the Income Statment (such as depreciation) are listed to reconcile to the Ending Cash Balance.
What is cash flow statment?
A cash flow statement seeks to project or report cash flows after expenses that could be used for debt service or retained earnings.
What makes retained earnings go down?
Retained earnings can go down if there is a negative supply of net income, or if more dividends are paid then net income. For example, retained earnings can go down if a company uses leftover cash to pay shareholders for previous years cash holdings.
Why retained earnings does not appear on a cash flow statement?
Changes in retained earnings are shown in cash flow from financing activities.
Can retained earnings be used for cash flow purposes?
yes retained earnings can be used to get more capital for business to smooth out the cash flow problems.
Journal entry to reflect cash dividends from retained earnings?
The name for journal entries that reflect cash dividends from retained earnings is closing entries. This also reflects book value and cash flow.
Where do you enter Retained Earnings on a Cash Flow Statement?
Retained Earnings does not appear on a cash flow statement; however, the net profit or loss for the period (which gets closed to Retained Earnings) is usually the second item on the cash flow report. Beginning Cash Balance is the first. Then, all the cash changes on the Balance Sheet (such as reduction of debt) and the non-cash items on the Income Statment (such as depreciation) are listed to reconcile to the Ending Cash Balance.
Why are retained earnings deducted to obtain the free cash flow?
Retained earnings are deducted because they are only used by the corporation. These are not distributed to shareholders as dividends so they cannot be used as part of that cash flow.
Do retained earnings represents the amount of cash available for dividends?
No. The answer is false. Wiley Plus?
What is cash flow statment?
A cash flow statement seeks to project or report cash flows after expenses that could be used for debt service or retained earnings.
What is the journal entry to write off patent?
debit retained earnings/cash / bankcredit patent account
Is it true that when the board of directors declares a cash or stock dividend this action decreases retained earnings?
yes it is..
What will be the journal entry when you have received 10860 from XYZ instead of 10863 from sales?
[debit] Cash / bank 10860 Debit retained earnings 3 Credit Accounts receivable 10863
Why are retained earnings reported as part of shareholders' equity?
Retained earnings is part of shareholders' equity. It is considered part of equity because it represents the profits that are retained in the company to fund growth. If a company would have paid out all past profits as dividend, then total assets (cash) would be lower, and retained earnings would have a zero balance. Because net income is computed after claims of third parties (interest, wages, etc), there is no claim of third parties on profits that are retained. So, retained earnings are not a liability.
