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What are the reasons for closing entries?
Type your answer here..To take retain earnings from a business for a certain length of time and debit it to a zero balance for the year.
How long do credit card companies keep records of old account?
Credit card companies typically keep records of old accounts for a minimum of seven years, primarily due to legal and regulatory requirements. This time frame allows them to maintain accurate records for credit reporting and fraud prevention. However, some companies may retain account information indefinitely for their internal purposes, such as customer service or financial analysis.
Is retain earning account is equal to profit or loss?
Profits and losses are determined via the income statement. When you close out the books for the year that profit or loss gets closed and becomes part of the retained earnings. A loss would decrease retained earning and a profit would increase it. Loosely put, the retained earnings account is a cummulation of all the profits and losses over the years (not counting any other things that affect the bottom line like dividends paid out and such)
Why the owners of the bussines given priority to the retain earnings instead of the dividend?
Business owners may prioritize retained earnings over dividends to reinvest in the company's growth, enhance operational capabilities, or fund new projects. Retained earnings can strengthen the balance sheet, improve financial stability, and provide a buffer for future uncertainties. By reinvesting profits, owners aim to increase the company's long-term value, which can ultimately benefit shareholders even more than immediate dividend payouts. Additionally, retaining earnings can help avoid the tax implications associated with dividend distributions.
What account's balance is carried forward to the next accounting period?
The account balance that is carried forward to the next accounting period is typically the ending balance of permanent accounts, also known as real accounts. These include asset, liability, and equity accounts, which retain their balances over multiple accounting periods. In contrast, temporary accounts, such as revenues and expenses, are closed at the end of each period, and their balances do not carry forward. Thus, only the balances of permanent accounts are reflected in the new accounting period.
What are the reasons for closing entries?
Type your answer here..To take retain earnings from a business for a certain length of time and debit it to a zero balance for the year.
Why retain earning and reserve are same?
Retain earnings and reserves are same because both of them are part of net income but the purpose of these accounts are different.
You have had an amex card since 1984 but you do not want to renew the card for the 55.00 annual fee what should you do?
Ask AMEX to switch the account to a card that has no annual fee. The account number will change, but the account will remain open on your credit report and retain the original opening date.
What is a retain?
Retained Earnings represent the amount that an entity has increased in value due to Net Income.
How long do credit card companies keep records of old account?
Credit card companies typically keep records of old accounts for a minimum of seven years, primarily due to legal and regulatory requirements. This time frame allows them to maintain accurate records for credit reporting and fraud prevention. However, some companies may retain account information indefinitely for their internal purposes, such as customer service or financial analysis.
Is retain earning account is equal to profit or loss?
Profits and losses are determined via the income statement. When you close out the books for the year that profit or loss gets closed and becomes part of the retained earnings. A loss would decrease retained earning and a profit would increase it. Loosely put, the retained earnings account is a cummulation of all the profits and losses over the years (not counting any other things that affect the bottom line like dividends paid out and such)
If you accept an airline credit card offer and take the miles and a free ticket and then cancel the card will it negatively affect your credit rating or result in harassment by the airline?
Depending on the airline you may have to give back the miles or pay for them. Many airlines now require that you maintain the account for 6 months or a year before you close it to retain your reward. As for your credit score, anytime you apply for a new card a credit check is done. This kind of check is the type that negatively affects your overall score. It will show up with along with a reason like, "too many recent credit inquiries." Also, when you open an revolving credit account, the entire available credit is attached as a possible liability, so it can negatively affect your credit in both of these ways. As templing as the offer may be, you should balance it against other things that you may want in the long run, such as as access to lower interest rates on a home mortgage or car loan.
Why the owners of the bussines given priority to the retain earnings instead of the dividend?
Business owners may prioritize retained earnings over dividends to reinvest in the company's growth, enhance operational capabilities, or fund new projects. Retained earnings can strengthen the balance sheet, improve financial stability, and provide a buffer for future uncertainties. By reinvesting profits, owners aim to increase the company's long-term value, which can ultimately benefit shareholders even more than immediate dividend payouts. Additionally, retaining earnings can help avoid the tax implications associated with dividend distributions.
Give two reasons why companies retain earnings in lieu of dividends?
1. to innovate 2. to build up resources for bad years
What are retained earnings and reserves and surplus?
Reserves and surplus At the end of an accounting period the company may decide to transfer part of the profits to a reserve and retain the balance in the profit and loss account. The reserve created out of profits transferred from profit and loss account is called general reserve. The balance in the profit and loss account is called a surplus and will be shown under this head in the balance sheet.The company can use the general reserve for various purposes including issue of bonus shares to shareholders and payment of dividend when profits are insufficient.The premium received when shares are issued at a premium to the face value is shown under the head reserves and surplus.Retained EarningsWhen a company generates a profit, management has one of two choices: they can either pay it out to shareholders as a cash dividend, or retain the earnings and reinvest them in the business.When the executives decide that earnings should be retained, they have to account for them on the balance sheet under Shareholder Equity. This allows investors to see how much money has been put into the business over the years. Once you learn to read the income statement, you can use the retained earnings figure to make a decision on how wisely management is deploying and investing the shareholder's money. If you notice a company is plowing all of its earnings back into itself and isn't experiencing exceptionally high growth, you can be sure that the stock holders would be better served if the board of directors declared a dividend.Ultimately, the goal for any successful management is to create $1 in market value for every $1 of retained earnings.Let's look at an example:·Microsoft has retained $18.9 billion in earning over the years. It has over 2.5 times that amount in stockholder equity ($47.29 billion), no debt, and earned over 12.57% on its equity last year. Obviously, the company is using the shareholder's money very effectively. With a market cap of $314 billion, the software giant has done an amazing job.·Lear Corporation is a company that creates automotive interiors and electrical components for everyone from General Motors to BWM. As of 2001, the company had retained over $1 billion in earnings and had a negative tangible asset value of $1.67 billion dollars! It had a return on equity of 2.16%, which is less than a passbook savings account. The company is astronomically priced at 79.01 times earnings and has a market cap of $2.67 billion. In other words: Shareholders have reinvested a billion dollars of their money back into the company and what have they gotten? They owe $1.67 billion.1 That is a bad investment.The Lear example deserves a closer look. It is immediately apparent that shareholders would have been better off had the company paid out its earnings as dividends. Unfortunately, the economics of the company are so bad had the profits been paid out, the business probably would have gone bankrupt. The earnings are reinvested at a sub par rate of return. An investor would earn more on the earnings by putting them in a CD or Money Market fund then by reinvesting them into the business.
What account's balance is carried forward to the next accounting period?
The account balance that is carried forward to the next accounting period is typically the ending balance of permanent accounts, also known as real accounts. These include asset, liability, and equity accounts, which retain their balances over multiple accounting periods. In contrast, temporary accounts, such as revenues and expenses, are closed at the end of each period, and their balances do not carry forward. Thus, only the balances of permanent accounts are reflected in the new accounting period.
Is it legal for retailer to store credit card numbers?
No it is not !If a person pays for goods or services by credit card, the Credit Card Company is the only organisation allowed to retain details about the customers card.
