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Which account below is not a subdivision of retained earnings?
There are no accounts listed. Therefore, it is hard to determine which account is not a subdivision of retained earnings. Expenses are not a subdivision of retained earnings.
Prior period adjustments are reported as an adjustment to which account?
Prior period adjustments are reported as an adjustment to the retained earnings account in the statement of retained earnings. This is done to correct errors in the financial statements that occurred in previous periods.
Can you debit asset and credit Retained earnings?
Assets are increased with a debit and decreased by a credit. Retained earnings is a credit, as they are an owners equity account and increase with credit.Retained earnings is what a company has after all expenses and dividends (if applicable) are paid. Retained earnings is shown on the Statement of Retained Earnings and is a credit which increases OE.
What is the journal entry to increase retained earnings?
To increase RE, depending on the account (e.g. Depreciation - Depr.) that caused or lead to the need to increase RE, you DEBIT Retained Earnings (RE). RE XXX Depr. XXX
What effect do revenues and expenses have on retained earnings?
Revenues Increase and Expense Decreases.
What occurs when expenses exceed revenues for a given accounting period?
Retained earnings are decreased.
Decreases in retained earnings that represent costs of assets or services used to earn revenues are called what?
expenses
Where will you put Prior Period Adjustment?
Prior period adjustments are typically reported in the statement of retained earnings, which shows the changes in retained earnings over a specific period. They are used to correct errors in the financial statements from prior periods and ensure the accuracy of the financial information presented.
Is unappropriated retained earnings credit?
Yes, since this account (Retained Earnings) is a credit account and an uppropriate retained earnings account is simply a non-restricted account which is Retained Earnings !!! Even the restricted/ appropriate retained earnings are credited.
What are current year earnings on a balance sheet?
Current year earnings are the net income or loss of the business for the current year. This amount is the difference between all revenues and all expenses on the income statement. Current year earnings are presented on the balance sheet only until they are transferred to retained earnings.
Which financial statement summarizes the changes in retained earnings?
Stetement of retained earnings summarizes the changes occured in retained earnings from opening balance to closing balance.
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.
