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Description: In other words, "the retained profits account serves as a bridge" to help connect the income statement and the balance sheet. What does this mean?

Business

Accounting

In other words, "the retained profits account serves as a bridge" to help connect the income statement and the balance sheet. What does this mean

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter3: Analyzing And Recording Transactions

Section: Chapter Questions

Problem 2Q: State the accounting equation, and explain what each part represents.

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Similar questions

Which of the following statements is true? Under cash-basis accounting, revenues are recorded when a company satisfies its performance obligations and expenses are recorded when incurred. Accrual-basis accounting records both cash and noncash transactions when they occur. Generally accepted accounting principles require companies to use cash-basis accounting. The key elements of accrual-basis accounting are the revenue recognition principle, the expense recognition principle, and the historical cost principle.
State the accounting equation, and explain what each part represents.
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